The record-union., 1893-05-15
Startling Disclosures as the Inves-
tigation Proceeds.
A DIRECTOR PREDICTS LOSS TO THE
DEPOSITORS
Attempting to Jump From Train
at Tracy A Citizen of Pomona
Meets Instant Death by Coming in
Contact With a Live Electric Wire.
Special to the REcoRp-UN1oN.

contact with Live Electric Wire.
| Special to the RECoRD-UNIoN
SAN JOSE, May 14.-As the investiga-
ton into the affairs of the Santa Clara
County Bank proceeds the disclosures be-
come more and more startling. The di-
rectors who at first spoke in a hopeful
vein and said that things were not so bad
as painted and that depositers would be
paid in full, have now turned from opti-
mists into pessimists.
Frank j. Brandon, who was appointed
by the directors to expert the books, be-
gan his work yesterday morning, and
already startling facts have been revealed
which were not dreamt of. 1t has been
ascertained that President Leonard
and Cashier Hayward, the latter now
dead, were in collusion with a third party
in this city to rob the bank. So far their
peculations and peculiar methods can be
traced back as far as December, 1881, and
further Investigation may reveal the fact
that they had begun operations prior to
that date.
ACUTE accidentally it was discovered
that they had stopped to forgery to ac-
complish their ends, having signed names
TO notes which were held as collateral Sc
curlty for money advanced. Such q
statement is made on the authority of one
OF the directors who was present in the
bank yesterday during the investigation.
In fact, so thoroughly alarmed have the
directors become over the revelations
hat they cannot keep away from the
bank, and although to-day no formal
| meeting was held they were all present
and eagerly awaited every fresh develop
ment.
II had every confidence" said one of
the directors, ''in Hayward's uprightness
and honesty, but what was revealed yes
terday clearly and Enthusiastically showed
that he was in collusion with Leonard
and another party in San Jose all the
time. Yes, sir; there has been forgery of
the blackest kind. but it is too early yet
to give details. When they are given it
will be found that this has been one of
the worst swindles ever perpetrated upon
banking concern.
I" 1t was quite by accident that the dis
covery was made that Leonard and Hay
ward kept two books, one of which ap-
peared straight and above board, and was
for the Board of Directors and for the in
spection of the Bank Commissioner. In
the other was recorded the defalcatioas of
the trio. A comparison of the two
showed at once the system under which
their operations had been carried on
| What the defalcations of Leonard and
Hayward will amount to 1t is impossible
as yet to say. Remember the investiga-
ton was only practically begun yester-
day, and it will take some time before
the whole truth is known.
II am firmly of the opinion that the de-
positors will. not be paid in full. 1t has
been said that the directors were ex-
pressing confidence that such would be
the case, but 1 don't know one director
who has said so. l never did If the de-
positors get so per cent they may con-
slider themselves well off. 1t is a wonder
to me that they left the desks and safe,
as they took everything else. Yes, there
was $500 in the aafe, and what puzzles me
is why it was not taken also.
The amount of certificates of deposit
not entered on the register so far is about
$4,000, but, of course, good many more
/
it was found that the numbers did not
run consecutively. and that certificates
had been taken from both the front and
back of the certiticate-book as fancy
seemed to dictate. There has been an
amount of carelessness and gross mis-
management that is simply astounding.
You would be amazed at the large
number of small deposits. Workingmen,
servant girls, in fact almost everyone Of
saving turn put their little all in the
bank, and it will go hard with most of
them if they do not get their money
back"
Bank Examiner knight figured out that
the total amount of deposits for which the
bank is liable is Sl90.376. as far as he could
now tell. Taking that amount as q basis
for calculation, he thinks that the depos-
itors will certainly get their money in
full.
Attorney Lieb goes little further in
his statement. He thinks that after pay
ing all of the depositors, 1.-THE directors
will have some $4,000 left, without call
ing for any of their Sl65,OO0 of unpaid
capital stock.
II Lleo eSllLlate turHS OuG 10 De cor
rect the banks losses will foot up 500. .OO0
In Knights opinion the losses. from
present indications, can hardly go above
S250,OOO, and in all probability will fall
below that figure.
The directors have made up their minds
that they stand to lose between SlOO. 900
and $780, 900. They are now beginning to
think that Hayward's and Leonard,s
stealings will eat up the $4,000 of their
surplus and undivided profits and proba-
bly, half of the paid-up capital stock of
S135, 900. They hope that will be all, but
they are not sure things will be that
favorable.