The herald., 1893-08-07
SOME FINANCIAL ROTTENNtSs,
The Pacific Banks Branch at
Riverside.
Bank Commissioners Condemn 1t,
but Allow it to CoAtinue.
They wrote Some Letters and Then APP
parsntly Went to slsep-rhs Case
IS IL Appears From Recent
Developments.

closures during the past week regarding
at least two of the banks which sus-
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
section II of an act creating this board: !:
First-Real estate. Sell all except
bank premises.
Second--Madera bank, John Brown
colony, $4,000. Undertake st once
spch negotiations as will enable you to
dispose OF this enterprise, and avoid q
iurther outlay on this account.
FouYth-RiveYside Banking company,
$275, 900. Reduce this balance as rap
idly as possible to $4,000.
The personal guarantee OF Z. ii. 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. HARDIsrY.
Then come the following letters refer
ring to what the Chronicle calls the
thrauch hank at RiVaraid6D.
DECEMBER 10. 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 $275, 900.
We have before expressed our opinion
to you OF the Riverside Banking COM
pany, and we are now obliged to report
the same to you as doing an unsafe
business, for the amount OF the above
indebtedness is go large that 1t exhibits
O necessity for borrowing. We have
given this bank much attention. 1t Ia
now endeavoring to increase its capital,
which, If successful, will place it in .
reasonably fair condition, but should
there be In the meantime any extraor-
dinary demand upon it we fear it could
not meet il. Yours respectfully,
BOARD OF BANK COMMISSIONERS.
May 5, 1892.
Hon. William II. b. Hart, Attorney General.
Sacramento, Cal.
DEAR SrR-Herewith we beg to hand
Won report of the Riverside Banking
company, in compliance with section IL
of the act creating this board and to ad-
wise 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
\ boon II, vein, s.IId while doioy t-~s -1ov1,
solely in the belief that it's affairs could
be improved the matter is now submit
ted to you for such action as y6r may
deem proper. Very respectfully
B. Mel. HARpIsrY.
The Pacific bank and the Kiveraide
Banking company were then called on
by the commissioners for certain infor-
nation, and Attorney General Hart was
notified of the fact. :. .b.a
Tie correspondence quoted is taken
from the Chronicle, anent which the
Riverside Enterprise OF yesterday morn
ing has the following to say editorially
1.-THE conduct of Attorney-Genera
Hart is inexplicable to any one wht
reads the reports and repeated warn
ines, given to him by the commission
ers, in reference to these two institu
tions. 1t is charitable to suppose that h'
acted on mistaken belief that matter
might be patched up and crash avert
ed. 1t does not seem probable, In view
of the pact weeks disclosures, that HI
will pursue this course of non-interier
ence much longer.
1.-THE disclosures that have been mad
place the failures of the banks in {
somewhat new light. They were not
Iike many solvent institutions whic
we're forced to suspend but have sine
resumed-the victims of financial strir
geney and general hard times. The
belong in quito different category.
the commissioners are to be bellevec
they were shaky concerns, reckleasl
managed, and in constant danger OF CO
lapse, even under favorable circun
stances. The truth concerning thel
has been long suppressed. 1t ls we
that the facts have at last come out.'