The morning call., 1894-05-10
called to order the committees report was

The report was prepared piecemeal at
frequent meetings since Friday last. The
committee stated it had more Information
in detail than was presented in this report,
but every depositor was welcome to these
facts.
On Saturday morning last the committee
called on the Bank Commissioners and
conversed with Mr.. Knight 0n the subject
matter of their rep 0rts of December, 1888
and April, 1894. inquiring particularly
concerning the different valuations given
by them of the SECURES of the bank, and
also his opinion of the present valuation.
He Informed the committee that in esti-
mating the relative value of assets and liza
bites the capital stock was not included,
but merely the deposits, as he did not
consider the stock to ba of any value. Dr.
Mcdonald, who had originally owned
about two-thirds Of the capital stock, had
conveyed it to other persons. large pOr-
lion of 1t going 10 lady in Virginia or
some other Eastern State. The rest of the
stock has been transferred for The purpose
of enabling the holders TO vote and hold
positions in the bank, and to enable the
real owners to escape liability as stock
holders. Mr.. knight is awaiting decision
of the Supreme Court in the Pacific Bank
case, which will determine whether the
Bank Commissioners will have absolute or
supervisory control in winding up the af-
fairs of the bank.
On tie question of assets Mr.. Knight
stated that the difference between their
report and that of the Attorney General
was largely caused by the latter including
some So COO of accrued interest which they
excluded, together with a decreased ap-
praisement of some of the property
caused by the large number of foreclose-
ure suits. The report continues:
Q We then waited on Attorney General Har t,
who met us by appointment at the Peoples
Home Bank. His apprasement in December
last placed the excess of assets over liabilities
at 1927 900. He considered the Pacific Bank
lot an asset, valued al S170,00 while the Com
niissIoners excluded 1t altogether. He in
cuded $40, 600 accrued interest on the ground
that il the loans were good the interest was
good also. He rated the Los Angeles Electric
railroad bonds at 80 cents on the dollar; the
Commissioners appraised them at 80 cents
He informed us That during the most stringent
itimes last summer. when money was almost
impossible TO get, a New York man offered 70
cents for them; that the company have spent
$3.50, 900 on The road within the last year,
which must enhance the value of The property;
also that another bank In this city holds S240,-
900 OF the bonds and values them at par. In
view of the conflicting opinions we have re-
ceived as to the value OF these bonds, your
committee finds ii impossible TO give them
specific values
Regarding the Phoenix Railroad bonds
it was stated that the total issue Is $685.
600, all of which are held by the bank.
There are II miles of road, miles of side
tracks, los lots 50x200 feet, an electric
power plant with DOwer-house, and a
franchise for lighting the city. These are
per cent bonds. which are said to have
always paid the interest. The Attorney
General valued them at 90 cents, or a total
of S14S, 900. The Commissioners put them
at 20 per cent, or S115, 800, but the commit
lee could not get definite information so
far. On real estate the committee was in
formed that Hart's appraisement of De-
CEN Der was S12, 900 less than the Commits
sioners' who have deducted S64. coo since
then. On mortgage loans Hart said the
Bank Commissioners had based their est-
mate on the heavy rains and a full
crop, and now on account of the dry sea-
son they have deducted S137, O00 Many
VI luo iHoIlSdSeS are III pIUCcos VI lOlo-
closure. judgments have been obtained in
a number OF cases for the principal, ac-
crued interest and costs, and there is a
strong probability that if the land were
sold to satisfy judgment the bank would
have to purchase and await a favorable
opportunity to sell it. The Attorney-Gen-
eral thinks that the bank, If shandled by a
receiver, could be wound up in two years.
He had the receiver appointed on the
theory that there had been fraud. IL there
were no fraud, and the bank were merely
unfortunate, its affairs could be liquidated
by the directors under the supervision Of
the Commissioners.
The committee found from Receiver
Sheehan that sum of $3.50. 600 Is owing
to about 5000 depositors After most care
full examination it was reported that there
are sufficient assets to realize, above all
expenses, so cents on the dollar for each
depositor, and with careful management
there is possibility of realizing more
The repayment TO the depostOrs of
whatever is realized must necessarily be
slow. No promise as TO the first payment
can be made, though in proper hands some
mortgages could be hypothecated within a
short time, some of the bonds could be
sold without sacrifice within a short time
also, and a substantial dividend could be
declared within ninety days after liqui-
dation commences.
All depositors were advised to retain
their books, as it is not impossible for
them to obtain dollar for dollar, and 1t
would be unwise to sell unless driven TO 1t
by actual necessity. II was also recon-
mended that before the next meeting in
vestigation be made to see whether some
temporary relief may not be afforded by
an advance upon passbooks at reasona-
BILE rate Of interest.
With regard to attorneys fees the report
goes on to say that Dorm & Dorm were
attorneys, but they did not appear to be
overburdened. Frank Stones connection
was alluded to. In three months he drew
$4,000 fees, although there appears to have
been no necessity for his services. This
to say the least is extortion, and might be
called robbery" said the committee
At present the committee could not
reco mmend the best steps to be taken in
Stones matter. but advce will be given
later that some proceedings be commenced
Ill