The herald., 1893-08-12
SOME FINANCIAL ROTTENNESS.
The Pacific Banks Branch at
Riverside.
Bank Commissioners Condemn it,
but Allow it to Continue.
They Wrote Some Letters and Then A p
pArently Went to Slocp-rhe Case
as It Appears From Recent
Developments.

From Mondays DAILY HERALD.
There have been some startling dis.
closures during the past week regarding
at least two OF the banks which aus
pended some time ago. The banks re-
ferred to are the Pacific bank of San
Francisco and the Riverside Banking
company of Riverside. To show that
adverse reports of both institutions were
made by the bank commissioners as far
back as December, 1891, the following
was sent to the Pacific bank by the
commissioners:
Referring to our examination OF the
Pacific bank, made December 7, 8 and 8,
1891, we hereby respectfully submit the
following instructions, as provided by
seetion IL Of an act creating this board:
First--Real estate. Sell ali except
bank premises.
Second--Msdera bank, John Brown
colony, $4,000. Undertake st once
such negotiations o. will enable you to
dispose of this enterprise, and avoid
further outlay ON this account.
Fourth-Rivereide Banking com pany,
1915 900. Reduce this balance as rap
idly as possible to $4,000.
The personal guarantee of r. H. Nc
Donald that all these instruction are to
be complied with at once is accepted by
this board in lieu of other proceedings
that might be deemed necessary in the
premises.
Yours respectfully,
B. Mel. HARDIsTY.
Then come the following letters refer
ring to what the Chronicle CALLS the
''brapch bank at Rivereide":
DECEMBER 15 1891.
william H. H. Hart. Attorney General. State of
California.
DEAR SIR-In our recent examination
of the Pacific bank, San Francisco, we
find that the Riverside Banking COM
pany of Riverside is indebted to the
Pacific bank in the sum of 1915, 900.
We have before expressed our opinion
|. to you OF the Riverside Banking COM
pany, and we are now obliged to report
tho same to you as doing an unsafe
business, for the amount OF the above
Indebtedness is 80 large that it exhibits
necessity for borrowing. We have
given this bank much attention. 1t is
now endeavoring to increase its capital,
which, il eucceeeful, will place it in a
reasonably fair condition, but should
there be in the meantime any extraor-
binary demand upon it we fear it could
not meet it. Yours respectfully.
BOARD OF BANK COMMISSIONERS.
May 5. 1892.
Hon. William II. H. Hart, Attorney General.
Sacramento. Cal.
DEAR SIR Herewith we beg to hand
YOU report of the Riverside Banking
combany, in compliance with section IL
OF the act creating this board and to ad-
viss you that for longer period this
bank has given this commission great
concern.
Everything has been done to force up
the management to proper realization
of its condition, but these efforts have
been in vain, and while delay has been
solely ia the belief that it's affairs could
be improved the matter is now submit
ted to you for such action as you may
deem proper. Very respectfully,
B. Mel. HARDIsTY.
The Pacific bank and the Riverside
Banking company were then called on
bv the commissioners for certain infor-
nation, and Attorney General Hart was
notified of the fact.
The correspondence quoted is taken
from the Chronicle, anent which the
Riverside Enterprise Of yesterday morn
ing has the following to say editorislly:
"The conduct Of Attorney-Gene
Hart is inexplicable to any one who
reads the reports and repeated warn
ings, given to him by the commissions.
ers, in reference to these two institu-
tions. 1t is charitable to suppose that he
acted on mistaken belief that matters
might be patched up and crash avert
ed. 1t does not seem probable. in view
of the past weeks disclosures, that he
will pursue this course of non-interfer.
ence much longer.
"The disclosures that have been made
place the failures of the banks in
somewhat new light. They were not
like many solvent institutions which