The morning call., 1894-04-19
The Pacific Bank Is Made a
Defendant.
BOND SALE COMMISSION CONTEST
A Policeman Sits in the People,
Home Savings Bank to Quell
All Disturbance.

at law. Thomas Fitch Jr. filed a CON-
plant yesterday against the Paelhc Bank
r. H. Mcdonald Jr., Frank V. Mcdonald.
T.. II. Mcdonald and the California Ralsln
and Fruit Growers Association. The sui
is for the recovery OF $40, 000 en- tie sale OF
$500 600 of bonds of the California Raisin
and Fruit Growers Association. 1t is
claimed that these bonds were issued IN
payment for lands belonging to that cor
poration, which has its location in Fresno
County. After the failure of the John
Brown Colony and the Bank Of Madsra
the Pacific Bank, thrOughitS general imam
cial agent, a. F. Johns, took possession OF
the colony and the bank Of MADEIRA.
1t is alleged by the plaintiff that after
this action it occurred 10 Frank V. Nc
Donald to convey portion of the lands OF
the John Brown colony TO an independent
corporation, and that The California Fruit
and Raisin Growers Association was
formed with officers and directors friendly
10 Mcdonald.
II was then that Mr.. Fitch claims that
S5OO,O0 of mutual coupon STOCK bonds
were issued, and these bonds he declares
were accepted by the Pacific Bank in pay
ment or as security. and the bank conveyed
the lands to the California RaiSin and
Fruit Growers Association
The object. 10 was stated, was to sell
these bonds to the profit of the incOr-
pnrators. About this time, it said that
Frank Y. Mcdonald. assisted by A. F.
Johns. was trying to float certain securi-
ties Of the Pacific Bank. Mr.. Fitch was
then engaged in the commission business
in New York. He declares that he was
approached by Frank Y. Mcdonald and
A. F. Johns. as representatives OF the Pa
cifc Bank and OF the California Fruit and
Raisin-growers' Association. and was
finally employed to negotiate the sale OF the
BONDS, and was allowed a commission of 8
per cent on the par value of all bonds sold
by him.
Fitch, relying on the $1,000. 600 capital of
the Pacific Bank and its surplus of $780,
900, says that he undertook their sale. 1t
was found that the sale of the bonds de-
pended upon Mcdonald and Johns show
ing that the securities back OF the
bonds were good. Fitch declares
with declined to place the bonds
with their clients. who were English,
unless the Pacific Bank would guarantee
the principal and interest Of the bonds.
This. he asserts, was done in resolution
passed by the board of directors of the
Pacific Bank on March Is. 1893. Fitch
adds that Gillette d Taylor. bankers and
take tie entire issue of the bonds at once.
and demanded the delivery of the bonds
for themselves and associates.
ct this time Frank V. Mcdonald was in
New York acting in behalf of the Pacific
Bank He declined TO deliver the bonds.
Then it turned out after the sale had been
negotiated, so Fitch claims, that Frank '.
Mcdonald learned that the real purchasers
of these bonds were the correspondents OF
the Pacific Bank in London, and it is
claimed that Frank Mcdonald refused to
ratify the sale, because be thought he
could effect the sale himself.
1t is further claimed that K. II. Melon
ala Jr., from his connection with the Pa
cific Bank. was cOgnizant OF these facts.
Fitch declares that the records OF the
Pacific Bank and of the California Raisin
and Fruit Growers Association are not
not accessible TO him, but that the relations
of Frank Mcdonald and Dick Mcdonald
to the two institutions were such that they
can be made defendants.
With this information and the notorietY
which the Pacific Bank has acquired in
the press. Fitch thinks that his claim can
be esta blished, and as an incident thereto
asks that all the facts in connection with
the dealings and suspension OF the Pacific
Bank be made public.
To this end, in addition to filing his
complaint. he has caused affidavits, notices
and snbpenas to be issued asking that the
dispositions of r. 81. Mcdonald Jr., NJ. ii.
Sherman and others be taken, and has az
piled TO have Harry j. LaSk, notary pub
lie. take these depoStlons.
James Alva Watt appears as the attor.
ney for the plaintiff.
II is deemed almost certain that the
Grand Jury will take cognZance of the
condition of affairs in the Pacific and the
PEOPLES Home Savings banks and that a
searching investigation will be instituted,
10 which the officials, employees and every
one now or at any recent time connected
with the institutions will be summoned to
appear before that body.
As pointing toward this is the fact that
Mclaughlin, the attorney and politician Of
Southern California, has come here hastily
and has been in close consultation with
N. II. Sherman.
There were two, meetings of the directors
of the PEOPLES Home Savings Bank Ms
terday. one of which lasted we'll ON W.
the evening. 1t was stated that nothins
but the most routine business was trans
acted. At the same time the Bank Com
missiODers were continuing their eXamina
ton. and Attorney General Hart was a
work with an expert on the books.
During good portion of this time AT
torney Frank NJ. Stone sat in the Cafe
Royal, adjacent TO the bank. 1t is salC
that Stone hopes yet to be reinstated in ;
legal position with the bank.
This might be accomplished if the Banl
Commissioners and Attorney. General Har
should make such reports as would neces
state the appointment of a receiver, pro
viding that that receiver were the friend
of Stone.
It is generally believed that the report o.
the Bank Commissioners will be ADVERSE
to the bank. The former report of the AT
torney- General was favorable to the bank
The officials at the bank declare that the
figures now are as favorable as when thu
ACKNOWLEDGEMENT made his last report
and that nothing has taken place which
would require him to change his formel
favorable opinion.
policeman sat in the bank durnl
Office hours yesterday. and the disturb
ances Of the dav before were not repeated
DR.. Julius Boushey, president of th,
bank, declares that he has been greatly
annoyed by the visits of persons to hi
private Office to discuss bank matters in
clamorons way. and adds that he is con
WINGED That these persons have been pur
,aaaaiV SAINT tharn Ia die fIIrl hin,