The morning call., 1893-12-06
EXPERTS TO BE ENGAGED.
The Bank Will Assist the At
tOrney-General.
THE INQUIRY TO BE THOROUGH.
The Bank Commissioners Have No
Confidence in the Present
Management.

The reason for the recent report Of the
Bank Commissioners on the condition of
the Peoples Home Savings Bank was
divulged yesterday.
1t is lack of confidence by the Commits
sioners in the business Intelligence and
administrative ability of the banks board
of directors.
Commissioner Gerberding, when ques-
toned by CALL reporter as to the nature
of the report to Attorney-Ge Hart,
replied:
I'VE simply said it was unsafe for the
corporation to continue business"
Upon what ground did you base this
sweeping statement"
1--WE consider that under the present
management the interests of all concerned
with the bank are placed in jeopardy. 1t
Is in the hands of the same people who
wrecked the Pacific Bank"
did You allege any specific acts of mis-
management"
mo. 1t was not necessary. Their
reputation was enough. Any man or set
of men who put the Pacific Bank into the
condition it now is are unsafe to have the
management of any financial institution"
Frank 81. Stone. advisory counselor for
the Peoples Bank is strongly in favor Of
the most rigid examination of its affairs,
and condemns the action of the CON-
miSsoners. He said: 1.-THE Attorney
General is so earnest 10 the interests of
deposiiors that be will make a thorough
Investigation. | am very anxious he
should do so, and shall join him In his
work.
"The examination by the Bank Com
missioners which, l am informed, occupied
only two days, was superficial. In a
rough way they said: We will scale off
20 per cent here and 10 per cent there
NO board OF bank commissioners can give
glance and then say the security Is worth
SO much less than its face. Such report
as they made ought TO be based on more of
an investigation than the Bank Com
mssioners by reason of their Limitation of
time could give to lt. There must have
been much guess work. No doubt they
underv alued in some cases and Overvalued
In others.
II do not wish to be placed in the atti-
tude of crIticiZing the Commissioners, but
submit that no man or set of men could
IN two days pass intelligentlv upon the
value of the assets of a bank with the
amount of assets the Peoples Home Saw
ings Bank has. Let US have a business
ike investigation. and n guessing.
Il have advised the directors of the bank
v
paired to call for more security or close up
the loan. l think they will follow that
advice, and are making preparations to do
Sc. In other words, there will be bona
hde effort TO get the assets in shape SO the
deDOSitOrs shall get their money! no mat
ter how the stockholders shall come out.
81 shall work hand 10 hand with the At
torney-General and the attorneys OF the
bank to determine the actual value of the
assets of the bank, and if after such thor
Ough investigation l find the assets in my
judgment are not sufficient to pay dollar
for dollar of every liability to depositors,
under no circumstances will l be II party
TO any scheme for resisting liquidation. If
on the other hand close scrutiny as tG the
value of the assets shall show such assets
to te greater than the liabilities to deposi-
tors, / shall advise resistance in court to
any attempt to throw the bank into
liquidation, believing, from the best advice
l can obtain, that assets of bank can he
better realized upon in the regular course
of business than by forced liquidation"
Upon MT. Stones being informed by the
reporter that the Bank Commissioners
reason for reporting the bank unsafe was
based on the personnel of the directors,
he said, with some show of feeling:
Then why did they go through the form
Of an examination? If that was the rea-
son, why did they not say At once 1t was
unsafe for the bank to do business? In
Bank had good assets TO the amount of
100000. with liabilities of So. 600, 900, uu-
der the advice of Mir. GerberdiDg, as re-
ported to me, the Bank Commissioners
would report the Pacific Bank unsafe,
simply because two Of the directors of the
Pacific Bank were the same as those in the
Peoples Bank, which Mr.. Gerberding
claims has been wrecked"
AttOrney-General Hart outlined to a
CALL reporter his course of procedure in
the affairs of the bank. "In the first
place." said he. nothing can be done
until an absolutely complete examination
has been made Of the assets and liabilities
of the bank. Tie Commissioners report a
nominal surplus of $1,000. Thev have d ot
presented any details OF facts. If they had
/ would still be obliged to make the exami-
nation in oruer to verify them. The law
is mandatory on that point l do not pro.
pose to go about 1t hastily i shall select
the best disinterested expert obtainable to
make the investigation. a man we'll in
formed as to the value OF securities. of
real estate and of the financial standing of
the banks debtors. There will be exam-
nations to make of the value of land In the
interior upon which loans have been made.
This will probably require a service by
itself. l should say the examination can
not be finished in less than ten days.
TN order to throw the bank into liQui-
dation 1t will be necessary 10 prove one Of
tuIec hlioSdllolo, udulciy. lDdL tn Dank
is insolvent, that the directors are in
competent or that they are guilty of fraud
such as would jeopardze the assets of the
bank. Before bringing any suit or de-
Gliding on course OF action, shall COM
pete the investigation. Until that Is
done, there will be no change of affairs.
.'Whatever Is done after the examination
shall have disclo sed the true status of the
bank will be final. 1t will be decisive one
way or the other. The Peoples Bank
will either 20 ahead with business or
shut up."
About 600 depositors applied to the
Peoples Bank yesterday for the S5. which.
since November Is. the bank has ALLOW
any deposition to draw. They were ad-
mitted in squads at the rear entrance.
Those who got in line very early were
waited on before closing hours, but some
who came as early as A. N. did not reach