Los Angeles herald., 1892-05-05
A BRACE OF WRECKERS.
TWO INSTITUTIONS SMASHED BIZ
KITE-FLYING.
How Jayhawker Worked His Game-You
wreck the Bank and I'll Wreck
the Laundry Railroad.

The suit of John Chetwood, jr., against
r. II. Thompson, R. p. Thomas and E.
A. Wilson, row being heard by Judge
Finn. says the San Francisco Examiner,
is developing some very racy tes-
timony in the bank-wrecking line. Chet-
wood represents the stockholders of the
defunct California National bank, that
once had quarters under the Palace ho-
tel. The three defendants were the ex-
ecutiye committee of the bank, and the
stockholders want to hold them respon-
sible for 100000 in the smash-up. Two
hundred thousand dollars of this is from
the capital stock, $4,000 in paid up as
sets, $40, 900 in profits and big lot of
interest to date.
The executive committee is charged
with being grossly negligent in allowing
the cashier, @. ii. Ramsden, to run the
business.
LOOSE FINANCIERING.
Several instances of gross negligence
are recited, all of them capital in their
way. There is that of loan of $4,000
to J. H. Woodland, late president OF the
Alameda County railway, the Laundry
Farm venture. Woodland (who is now
"Javhawker" OF the Los Angeles Times)
had method that is known to astute
bank manipulators as "kiting." He
would 90 to the bank, discount his draft
on "straw man" in New York and
raise good-sized pile of gold. Then he
would HE to the bank and telegraph
the amount on before the paper was
presented at the other end of the line.
t'Kiting," in the hands of an active
financier, is great way of doubling mp
capital. The main point is to stand
from under when the crash comes.
When the crash came in the present in
stance the bank was out $75, 900.
Decker G. Wickham, it is said, had
no difficulty in raising money on "wind''
from the management of the bank. He
will never explain how he did it, how
ever. When the excited stockholders
began to ask questions some time ago
Wickham was found to have got out oi
the bank some $4,000. He was ar
rested for getting money under false
pretenses. He died in prison, but he
claimed all along that 1t required no
pretense to get money out of the old
California National bank.
The stockholders and Judge Finn are
at present seesawing OH proposition
that is of immense Importance to the
former. They have advanced certain
instances, Woodard and Wickham among
them, where gross negligence of duty
was shown in loaning money, 30 they
claim, and they want to collect for the
whole amount that went to smash. The
court, however, has ruled to only allow
them for the cases where they prove
that loans were made in gross negli-
gence. This will entail an immense
amount of work on their part.
AN EX-sENAToR's STATEMENT.
Ex-senator George E. Whitney, a
brother-in-law of Judge Field, and a
member of the auditing committee OF
the bank, was on the stand yesterday
and told about report his committee
made to the bank officials. Briefly, the
report was to the effect that the execu'
tive committee had abdicated all its
functions, and it called on the executive
committee to attend to it's duties.
Chetwood said that he went to R. R.
Thompson some two weeks before the
bank failed and consulted him about
selling his stock. Thompson advised
him to hold it. Alter the failure Thomp.
son admitted that it was all due to
Ramsden's furtive way of running
things. Attorney B. Noyes bore out
Chetwood's statements.
The bomb of the day, however, was
the deposition of R. H. Woodland
Woodland declared that all his dealings
with the bank "were fair and above
board" The directors once professed
ignorance to him about his account
whereat Woodard said "If you gen
tlemen don't know what has been goinl
on here openly for months you are the
- set of chumps I ever knew to bt
intrusted with other peoples money.
"On another occasion in speaking tt
Thompson, he said to me: 'Presiden
Thomas has bought control of the stock
I can afford to lose $4,000 or $50, 900
but for every dollar lose he will los
two. He can't afford to lose any. I'm
going to wreck the - bank
"Then," Gays Woodard, 81 said t
him: If you do that, Thompson, II
wreck the Laundry Farm railroad,
And both OF US succeeded"
The case poeS on todav