Los Angeles herald., 1892-02-26
A MELANCHOLY STORY OF FINANCIAL
FOLLY AND GUILT.


The visit of Bank Examiner Cham
berlain to San Diego, and the action OF
Receiver Pauly in causing the arrest OF
President Collins, of the defunct Cali
fornia National bank of that city, has
called attention anew to the loose sys-
tenn of financiering which made possible
and led up to this catastrophe. Quite
a number of years ago Mr.. Collins came
on from Cheyenne to the city of Bay'n'-
climate. He appears to have had $40,-
600 with him, and desired to go
into the banking business in our
southern neighbor. Everything was
propitious for his project. He had in
.gratiatin manners; and was quite ca
pable of participating in, and tanning,
the enthusiasm of San Diegans.
His plan seems to have been recon-
mended by its simplicity. He invited
deposits by paying interest upon them,
a procedure which the more conservative
banks failed to initiate. As result, he
had succeeded in hornswoggling $700, 900
of the surplus earnings of all classes of
San Diegans, ranging from those of the
servant girl and newsboy up to those OF
the merchant. 1t is said that after 3
O'Clock of the day on which the failure
of the bank was announced deposit of
$2500 was received from the chief of the
fire department of San Diego. 1t is even
added that deposits were taken up to 5
| Ii 1ox ha Il nh oil Tn,
addition to the losses of individual de-
positors, the city of San Diego had
$50, 200 deposited in the moribund insti-
tuition, and the county 100000.
Outside of the $700,000 due depositors,
it is alleged that there were other liabil-
tiles to the amount of 100000. When
the bank closed it is said that there were
$15 900 in its vaults. Under the circum-
stances, this was a pretty good showing
when all the facts were taken into the
count. Receiver Pauly has since in
creased this sum to between $50 900 and
$50, 900.
The Investigation, as far as it has
gone, has shown some very peculiar
things. There is said to be a
deficit of about 100000 which
is referable to Messrs. Collins
and Dare. Owing to the faulty system
of bookkeeping it is impossible to seq
regate this account. The whole system
of conducting the affairs of this unfor-
tunate bank seems to have run on the
lines of Danton accelerated apostrophe,
''To Dare, to Dare, always to Dare"
What our system of bank examiners
and bank commissioners amounts to is
well shown by the career of this bank.
1t supplements the disclosures of the
Keystone bank of Philadelphia, in
which Postmaster Wanamaker, of holy,
pious and immortal memory, officiated.
As rule, these able gentlemen find out
the mischief after it has been DONE
They are supposed to be invented for
the purpose of protecting the public,
and keeping the banks, which they are
appointed to supervise, on the plane of
safe and stable finance. AS matter of
fact, they are never heard from till the
mischief has been done.
The collapse of the California Ma
tional bank of San Diego reminds
one OF the celebrated failure Of the
Temple & Workman bank of this
city, in 1875. In that disastrous
financial cataciysm about 81 ,2O0,O was
swallowed up. The failure in the case
of Temple & Workman was precipitated
by that of the Bank of California in
September, 1876. Ii it had been prop
erly handled, the Messrs. Temple &
Workman had sample property to have
paid twice over every cent Of their liza
bilities. But the times were financially
out of joint. Distrust existed on every
hand. the black financial cloud spread
ing from San Francisco all over the
coast, and princely estate was dissi-
pated without the return of SO much as
a dollar to the depositors.
Los Angeles bankers learned then a
lesson which they have never since for
gotten. As result OF our past expert
ences our banks today contain larger
proportion of coin to the deposits tn an,
almost, any other in the United Sta tes.
One such ordeal was enough for a
quarter of century. Fortunately for
the stability of our financial institutions,
the banks of Los Angeles anticipated
the bursting of the BOOM by shorten
ing sail, and what would otherwise have
been storm, was ridden out in safety.
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