The morning call., 1894-04-28
sCATHING WORDS ARE USED.
Bank Commissioners Complete
Their Labor.
GROSS EXTRAvAGANcE CHARGED
Liabilities Found to Exceed the AS.
sets by More Than a Hundred
Thousand Dollars.

The Peoples Home Savings Bank has
been pronou ncedNDsafe by the Bank Com
missiouers 10 a report submitted to AttOi
ney-General Hart yesterday and signed by
ali three of the Commi ssinners.
Some days age The CALL briefly out
lined what this report would be, Stains
that i: would be an adverse one, and an
nouDcing exclusively that the Bank Com
missioners would find the assets abou
100000 less than the liabilities.
The report finds that the liabilities ex
coed the assets in the sum of S137, III 81.
The report is a long one, embracing ff
teen pages of typewriter copy. The
resources and Liabilities, as shown by thu
banks books Oh the day of the beginning
of the examination, April IA, are set fortl
at length.
The books make the two sides balance
the amount being 81, 965. CSC 9S.
In commenting Oh these figures, the man
agement of the bank, the prior report o.
the Bank Commissioners and Attorney.
General Harris action at that time, The
Bank Commissioners make use of some
scathng language. The report says:
Our last examination aud report of said bank
was made 10 you ON December l last, in which
report, after careful examination and investi.
cation of It's management and close valuation
OF its assets We showed a very small surplus
over and above the amount due its deposi Ors
We stated 10 you then that the bank WAS unsafe
and should be closed up under section XI Of
The bank act.
You could not agree then with our views and
after making a personal examination and sub
mitfIng The value of the assets to others you
nUally placed them at greater valuation and
allowed the bank 10 continue. Since that date
Developments have proved, We think. The cor.
Teetness OF oar judgment. We are aware that
opinions may honestly differ as 10 Ghe valua-
ton OF properties located in different sections
of our State as well as 10 bonds and invest
ments held by the bank. But when tile meth
DDS aud practices of any bank are ceceiving
aud perhaps dishonest. its expenses excessive
and It's general management not IN the interest
OF depositOrs, to pronounce such bank unsafe"
is not entirely question OF the value of its az
sets.
sion with undue prejudice. After we have III
VestIgated and are cOgnlZant of the methods
and practices of those who controlled the Pa
citc b INK for years past. whose transactions
bringing sorrow and rum to its many deposit
Ors, and when we find the same men in control
OF The Peoples Home Savings Ban>, its vice
president attorneys. officers and directors. EN-
poyeS and numerous satellites, and in view of
The thousands OF depositOrS and their interests
IN Il savings bank, this commission is fully
Justified 10 It's course and recommendations.
a paragraph is devoted to the capital
stock, and the report declares:
The bank has transferred, by resolution of
lis board OF directors, 10 DIR. William JenniDg-
S0n as Its owner-one OF the directors of the
bank and the assistant secretary-3157 shares
of its capital stock, the property of the stock
holders. without the payment OF one dollar in
consideration therefor. and placed The same
among the banks collateral loans" While
there may be no value TO Ibis stock, the pro-
pTiety of dSposiug OF this large amount OF
stock, without the consent OF its Stockholders
and without payment in cash therefor, 10 any
individual IS questionable. This stock should
be Cancelled and taken off from its capital
stock. This transfer was evidently made 10
increase the assets upon the BOOKS of the bank
and keep The capital stock intact. and 10 maiD-
Iala and continue he control of the bank III the
hands OF II. Ii. Mcdonald Jr. ana his friends.
With respect to deposits and depositors
the Commissioners say:
There have been received some deposits
which have been married. on its certificates as
with the general deposits. No special de-
post" account has been kept upon its books
They represent that these Will be paid upon de
mand.
There are about 10000 depositors. mostly Of
Ordinary deposits" Some are as small as 10
cents. Probably seven-eighths are for sums
less than $500.
Very few genuine savings deposits nave been
received since the suspension of Lhe bank.
The amount of the mortgage loans as
shown by the new ledger is 1928, S29 a.
The Bank Commissioners place 1t al $685.
$50 "a. with possible reduction of $4,000
more.
OF these mortgage loans the report saws
OF the fifty mortgage loans. thIrty-six (36) oil
them sre now in process of foreclosure; some
are in suit only. some in judgment. some iu
Sberif's certificate and SOM property sold
now subjec: to redemption. The original loans
amount 10 S41S,97 90. The large altOrnevs'
fees, court eXpenSes, Ieeeiverships and Other
expenses adsd 10 make this total of S457-
55S IS. The larger portion of these proper
ties VIII have to be taken by the bank. These
properties are 10 Inherent counties-in some
sections depTesSiOns IN value OF land are more
than in others; it is difficult TO arrive at The
present value.
& paragraph is devoted 10 the certificate
of deposit on the Pacific Bank for S200. OOC
as collateral loan. bearing interest. and
tie report says: "Of late this has been
charged up 10 mortgage loans" the secur-
iy being deed to the Pacific Bank build
ing. The decision of the court that the
deed was taken Is mortgage to secure
tie certificate of deposit is maintained. and
the fact that an appeal bad been taken to
the Supreme Court cited. The Commits
si0ners fiud that the value of The property
given as security for the $500, coo is bnt
e165.000, and add: IF. Oh the other hand.
the deed or mortgage should be fulfilled
by the courts. the loss over estimate will
be about 0,OO0."
The ledger balance on stocks, bonds and
warrants is S4lZ544. Ihe Commits ioners
estimate is S277.679 The 2S9 shares OF
Pacific Bank stock on the ledger are rated
at SAC, 365. The Commissioners find that
they are of NO value The other deduc.
tons are made on Los Angeles Consoli.
dated Electric Railway bonds and or
Phoenix Railway bonds.
Quite large increase over the ledger
balance of S3o0S1 81 on real estate owned
is found by the Bank Commissioners as
the result of recent foreclosures and the
transfer OF accounts from NOR gage loan:
TO real estate, but the report continues
that when all the foreclosures have beer
completed the bank will find one-half Of
its total assets tied up in unavailable rea
estate. requiring long time to convert into
cash for the benefit of its depostors.