The record-union. [volume] (Sacramento, Calif.) 1891-1903, 1895-12-18
REMINISCENT OF A BANK FAILURE

REMINISCENT OF a BANK FAILURE
Richard II. Mcdonald, Jr., has recent
embezzlement connected with the fail
ure of the Pacific Bank. Mr.. Mcdonald
has served a long time in the County
Jail Of San Francisco. Our readers,
however, must not assume that his ac-
Quittal on charges that have been tried
delivers hiIn from his dungeon. There
are other charges on which he is held
and of which he must be acquitted be-
fore he will go free. There appears to be
some relaxation of the vigor of his pros
ecution lately The probabilities are
that those who are prosecuting him
deem that he has suffered quite enough.
We have always felt a genuine sym
pathy for this mistaken man. It has ap-
peared to us that he was forsaken of his
friends Whatever a mans errors or
mistakes may be, there are those who
are under obligation to stand by him.
The temperance of Mcdonald in
court recalls the fact that when the
Peoples Home Savings Bank was or
ganized, and the Pacific Bank became
its treasurer, we called attention to the
fact that a savings bank had no bust
ness to use a commercial bank as the de-
pository Of its funds; that to do SO was
q violation of sound banking principles.
We called attention to the fact that by
such deposits the Pacific Bank would
not become merely the custodian Of the
funds, but would be debtor to the Peo-
pies Home Bank for whatever amount
was deposited by it; that the organiza-
ton of a savings bank as tender TO
commercial bank is obtaining banking
capital for a commercial bank under
false pretenses.
1t is interesting now to recall the cry
of horror which rang out from the Pa
cific Bank Dr. R. H. Mcdonald was
among those most loudly protesting
against a species or criticism which
would have a tendency to injure the
credit of the Pacific Bank. At the same
time these virtuous protests were be-
ing made, the Pacific Bank was rotten
to the core; and now the retrospect af-
fords ample evidence that the Peoples
Home Savings Bank was organized
simply to prop up a failing banking in
stitution.
Connected with the comments made
concerning the Pacific Bank and its re-
lation to the Peoples Home Savings
Bank were some animadversions upon
the street car companies at Los Ange-
les. These street car companies likewise
protested that their condition was a
most fourishing one, their solyency I'M
questioned and their future brighter
than a monday sun. These protesta-
tions for time gave us pause We
entertained misgivings of having done
these very worthy institutions some in
justice. There was no intent or desire to
do so. The comments related to matters
OF public concernment and were in
dulged in from the highest motives
which influence the course of journal
ism.
The Pacific Bank, hollow as an egg
shell with the meat blown out of it.,
broke in at last and the street rail-
roads of Los Angeles have found it
necessary to undergo processes OF reor-
ganization. which is another name for
combining into a semblance of unity
the fragments into which bankruptcy
breaks financial institutions. OF course,
there is nothing in the insolvency of a
public enterprise like a street railroad
or steam railroad, or a steamboat
company, or a manufacturing institu-
ton which calls for any animadver-
sion upon their administration. The
best institutions sometimes fail, and the
best management sometimes fails to
avert unforeseen disaster. Besides this,
street cars are in a sense private corpo-
rations. Those who invest in their secur-
tiles. whether in the form of stocks or
bonds. ought to know what they are
doing. and take their chances with the
rest of the world in their future sue
cess or failure. But in the case of
banks it is different. The ordinary cit