The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-10-01
CAPTAIN JIM NOW.
Charged With Converting Pa
cific Bank Claims to
His Own Use.
AN ATTEMPT TO REMOVE HIM.
A. j. Clunie Precipitates a Spicy
Discussion Upon the Presidents
and Directors Methods.

And now Captain Jim Mcdonald, as
president of the Pacific Bank, takes the
center of the stage in that distressing COM
plication.
Andrew J. Clunie as counsel for P. F.
Dundon, a creditor of the bank, yesterday
brought suit against Captain Jim upon the
allegation that he is using his position to
deceive and lntimidate creditors into sell
ing their claims for fraction of their face
value and thus releasing him from the
fear of prosecution at their hands for his
individual liability. The other directors
are made co-defendants, but the allegations
upon which the suit is based are directed
at the president.
1t is alleged that letter has been sent
out to all of the creditors, under a Pacific
Bank letter-head and signed by S. E.
Farnum as manager, stating that as a re-
suit OF the best efforts of manager and
directors for the year fpast a dividend of
but 15 per cent had been realized; that
with the same efforts for still another year
perhaps another Is per cent dividend
might be declared, which would wind up
the affairs OF the bank; but that, further
if the creditors desired, this Is per cent
would be paid at once in consideration of
formal release of the claim.
1t is alleged that all replies conserving
to this arrangement are turned over to
Captain J. M. Mcdonald, who personally
pays the money and secures the release.
Captain Mcdonald owns one-sixth of the
capital stock of the bank, and Mr.. Clunie
further alleges that the creditors have a
good case against each and every stock
holder proportionate to their holding, and
that Captain McDonald's personal respon-
slbll1ty is very considerable-as much, if
not more, than this Is per cent which he
| pays for the release; that by securing
these claims he heads off the possibility of
suit upon them for their face value, and
puts himself in position to, in twelve
months or so, recover the money and pos
sibly more = indeed, the possibility of
| more is shown in this argument to be con-
| siderable. 1t was declared that Captain
| Mcdonald had purchased claims aggre-
| eating S150,000.
MIR. Clunie went before Judge Hebbard
yesterday morning with a motion for the
removal of the board of directors.
Bank Commissioner Kilbourn, who was
present, was required to answer some ques-
| lions put by Clun1e. He stated that he
| had become aware that Captain Mcdonald
was purchasing claims; that he had
| spoken to him about it and Captain Nc
Donald had assured him that he would
| not personally profit by the transactions,
| but that the purpose was simply to hurry
along settlement of the banks affairs.
He was asked why suit had not been
commenced against the old board of direc-
| tors and' he answered that the Commits
| sioners had requested the new board to
begin the suit, but that the time was not
| deemed ripe.
Judge Sawyer was present, representing
| the board of directors, and between him
| and Clunie a rather warm tilt of words
| took place. Judge SAWYER declared that
| hn hoo Nod lob IL
toward bringing about a satisfactory settle
ment of the affairs of the wrecked bank
and deserved to be complimented rather
| than charged with dereliction OF duty.
He said there was no sense in bringing suit
| against the directors unless service could
be secured upon them, and that this was
| impossible so far as the McDonalds were
concerned while Frank remained in Asia
and the doctor in Europe.
| Mr.. Clunle answered rather hotly that
| there were other directors than the Nc
| Donald's upon which some experiments
might be tried. There was Columbus
| Waterhouse, for instance, a well-known
citizen, who was still living in this City,
| and can be easily reached, yet no effort
had been made do so. Judge Hebbard, he
said, had charged Grand Jury two years
ago to the effect that the old board had
wrecked and looted the bank and yet no
| steps had been taken against then. He
declared that 1t was easily apparent that
| they are waiting until the claims become
outlawed and then the creditors will get
nothing.
Judge Hebbard said he thought the duty
of bringing suit devolved upon the Bank
Commissioner, and that they should be
given little time. If they do not bring
the suit then the creditors will begin the
action.
During the discussion Clunie raised the
| onpS1iOn of his right tn exam tho hOole
of the bank, Attorney Sawyer having de.
MED it, declaring there was no law which
| required the bank to show the books to
| creditors.
Clunie said he had right to the proof
that all the dividends being paid by the
| directors were upon genuine claims, and
Judge Hebbard said he certainly had
Action was postponed until Clunie and
the Bank Commissioners can confer and
decide unon the action to be taken