The morning call., 1893-05-17
THELOOTED BANK.
Directors Cropping for
Light.
REPORT EXPECTED TO-DAY.
Commissioner Knight Will Be Able
to Tell How the Institutions
Affairs Stands.
REPORT EXPECTED TO-DAY.
Special to THE MORNING CALL

L
ding operations with the funds of the de-
funct Bank OF Santa Clara, exposed In this
mornings CALL, was an eye-opener to
the directors, shareholders and others
concerned The directors seemed stag
rered at the bOldness of the pairs meth
ods. and could scarcely bring themselves
10 realize that men who had their utmost
confidence could have been guilty of such
v.laiuy.
Till the expose all was serene and every
body was in hopes that the worst had been
known. Now there is general consterua-
tlou and dismay and people are asking
themselves. How will it all end? The di-
rectoTs held consultations inside the bank.
and some more scared than others begged
to be told the worst. The answer given
was 10 wait patiently till the completion
Of the investigation tomorrow, and as
soon aiterward as possible statement of
The assets. liabilities and probable defalca-
tions would be prepared and laid before
them.
Tie directors have come TO realize the
fact that the full extent of the defslcations
cannot be known till il can be definitely
ascertaned what notes held by the bank
are genuine and what forged. Bank Com
during his examination last December and
has since seen two men whose notes are
held by the bank One is a Mr.. Scully, an
eX-rancher Of Saratoga. whose paper for
about $1,000 was among the assets of the
suspended institution; the others name or
the amount of lis alleged indebtedness is
not given. Both gentlemen, although hay-
ing dealings with the bank, denied signing
aud danlorad than, forusrias
Mr.. Knight has not been able in his busy
moments to see the others yet. How many
forged notes there are or what the aggre-
gate amount of them will be it is, of
course, impossible to say yet.
The question perplexing the directors is,
How much did President Pierce know of
the Leonard and Hayward transactions?
Yesterday he denied to your correspond
ent knowing or having the slightest sus-
picion Of the banks rottenness till the
day before it closed its doors. Notwith-
standing this denial there are few point
that require explanation before it can be
accepted, which explanation will proba bly,
be insisted upon. One is why did he draw
so largely out Of the bank few days be-
lore il closed down?
The feeling of distrust regarding Presi-
-
some stanch friends. who point to his pub
lie career and keen business enterprise in
Iefutation Of the charge that he knew Of
Leonardo misdeeds. Still, the division of
bis shares is looked upon with suspicion,
notwithstanding his explanation. and peo-
pie are wondering what interest. II any.
VIII he claim to have in the James P.
Pierce Company.
There is one thing certain and that is
that the directors knew absolutely nothing
of the inner working of the banks affairs.
Leonard had his own way entirely.
81 never thought Of examining the banks
books, said a director to-day. Statements
were submitted to US, and as we imagined
We were being guided by honest men it
never occurred to US to doubt their genu-
ineress. l now see how ouuageously we
we're deceived. l now remember that at
our meetings Pierce insisted upon Leon
ards salary being increased. 1t was first
by $50 per month. then 500, and later by
te2e55r1-He said it would pay to give
him that latter amount and do nothing but
sit on a chair in his Office. BE also told us
Leonard had been offered $1,000 per year
from bank in San Francisco. Well, SIT,
THE CALLS article is startling without
doubt. l am heartily sick of it all and
wish devoutedly the worst was known"
Commissioner Knight continued his in
vestiGation to-day. at the conclusion Of
the days work be said that more fraud
usnt certificates OF deposits had come TO
light, and the amount would now aggre-
gate nearly $4,000. lie hoped there would
be no more. Outside that there was
nothing 10 speak of. He was waiting for
news from New York giving the amount
Of The banks indebtedness there, which
he expected to receive tomorrow, and he
then would be in position to know the
banks liabilities. He would finish his
investigation tomorrow, and as soon as
possible would submit his report to the
directors. The notes supposed to be for
geriss aggregate quite large amount, but
itwould take some time TO find out which
Were actually forged. He still had hopes
that the depOsitors would be paid in full
outof the banks assets.
There is, apparently. determination to
give as little Information as possible till
the exact figures have been ascertained.
The bank was lit up tonight and clerks
and accountants were busy at work with
lie doors locked.
a rumOr was floating around tonight
that thedirectors had definitely decided to
arrest Leonard. S. +. Leib, attorney ftr
the bank. was seen and he said there was
no foundation for ii. II there had been
he would have known it.
In view Of the developments people are
surprised that Leonard is not placed under
arrest ma an officer stationed at his house
till he RECEIVERS from his Illness. 1t was
pointed out that Pierce having character
lied his signature to the $40, 900 note as a
forgery, the bank had right to demand
that be should institute criminal proceed
lngs against Leonard for forgery, as the
bank loses the money. Why this has not
been done is a subject for further comment.
a legal gentleman, perhaps unconsciOusly
gave the reason to-day when he remarked,
Who Is TO prove whether Leonard or
Hayward signed it?"
The old story that Leonard was seen
coming out of the bank on the Monday
and Tuesday nights before the bank closed
down has been revamped. Morse insists
that he saw him, while Leonard's attorney
In this city comes out with statement
that he was with him both nights until
about midnight.
Another question discussed Is as to
wnat day and hour the clerk of the Pacific
Manufacturing Company, named Post, was
seen to leave the bank with bags Of com.
inns clerk used to go regularly Monday
mornings 10 the bank for money to meet
tAe mems wages, the men being paid at
the noon hour. blt il is asserted that he
was last seen loaded up with bags of coin
Monday afternoon between and 6. What
makes this point subject for controversy
is that Pierce is said to be largely inter-
ested in the company.
+. r. hayward, the dead cashiers broth
er, is singularly tenacious in his belief
that everything viii come out all right for
Lis brothers reputation. lie said today
that after Knights investigation was flu
lshed he will start a rigorous one by CON-
petent experts to get at the root of the
matter though it should take him all sum-
mer.
1t is earnestly hoped by all interested
that some definite data may be obtained
tomorrow when Knight concludes his in
vestigation. so that it may be known with
with some degree of certainty what the