The San Francisco call., 1895-10-17
THE BOARDS NEGLIGENCE TO BE
PROVED BY It's OWN
RECORDS.
DECEIVED THE DEPOSITORS.
WHAT IT Is CLAIMED THEY DID IN
BEHALF OF THE BANKS
OFFICERS.


Bank Commissioners, Kilburn, Magee and
Fuller, for failure to report the insolvency
of that bank TO the Attorney-General.
Mr.. Clunie opens his statement by say
ing that he had several days ago placed
before the Governor g complaint against
the Bank Commissioners and demanded
their removal under the section of the
bank act which provides that if any Com
missioner shall have knowledge of the in
solvency or unsafe condition of any bank
and shall neglect to report the same to the
Attorney General he shall, on conviction,
be punished by fine or imprisonment or
both, and his office be declared vacant by
the Governor.
As to the source of his infor nation he
says: "The greater part OF the matter
here presented is taken from the files and
records of the Bank Commissioners, and,
as against them, must constitute the high
est degree of evidence"
Mr.. CIunie goes on to say that the bank
failed October 16, 1894, when it telegraphed
the Commissioners III San Francisco simply
that il had suspended business.
On the same day Commissioner Kilburn,
who was in San Francisco, telegraphed to
J. B. Fuller, then in Los Angeles, that the
bank had suspended. and that he would
attend, and wrote on the same day letter
TO Mr.. Fuller IN which he said that he had
sent Mr.. Dunsmoor, the secretary of the
board, to Merced.
Mr.. Clunie then continues:
Following the last letter Mr. Dunsmoor the
Commissioners secretary, went to Merced, and
while there, and with his knowledge and con-
sent and that OF the Board OF Bank Commits
sioners, the board of directors OF the bank
passed resolution putting the bank into what
they and The Bank Commissioners have been
pleased to call voluntary liquidation. While
there Mr.. DunsmooF forwarded TO the Office of
the Bank Commissioners at San Francisco,
directed TO Mr.. kllburn, the following state
ment of the banks condition as taken from its
books.
The statement referred to by Mr.. Clunie
gave the total of the value of the banks as
sets as $3.50, S73 03, and liabilities the same.
Mr.. Clunie goes on to say that accompany
ing the report was letter from Dunsmoor
TO kllburn informing him that he was
proceeding to verify it. But no vertical
ton of the report is shown on the
records of the Bank Commissioners, and
shortly after the failure, with the knowl-
edge of the Commissioners, negotiations
were opened on the banks part with an
other bank of Merced to afford some relief,
and in this negotiation an appraise-
ment of the assets, made by Milton Huff
man and Il. I. Dixon, fixed them at so per
cent of their face value, provided they
were realized upon at once, and this fact
was reported to the Commissioners.
1t is then recited that on the Sd of No
vember, 1894, letter was received by the
Commissioners from ]. w. Howell, cashier
OF the Merced Bank, containing the fol-
lowing language:
part of the depositors of this bank held
meeting and appointed a delegate to make an
examination into the condition of the bank,
and we think from our knowledge of the prin-
cipal agitators that the idea is born of idle
curiosity more than of an honest endeaYor to
give information concerning their interests
The condition OF the bank, its assets and liabil-
ities familiar to you, and it is hardly neces-
sary to state that it would be of no benefit TO
any one interested TO have that knowledge
common property of this vicinity: it would TO
those who did not know intimately the situa-
ton create anxiety and apprehension, where
there is now large measure of confidence
there weuld be distrust, and our labors in
liquidation consequently increased. In making
collections and to prevent defeat of our move-
ments against persons owing the bank, we
deem it highly important that every one in the
community be kept in the dark.
We write this matter TO procure your views
upon the rights OF these depositors q S well as
the propriety and advisability of making such
disclosures.
letter from you, to be shown to these un-
easy creditors, viii allay their anxiety and re-
move cause of much annoyance.
Mr.. Clunie continues:
In answer to the above cry of distress on the
part OF this bank, and in response to the re-
quest therein made for decoy letter, over the
signature OF sworn officers of the State, to lull
and deceive depositors, whose rights they were
sworn to conserve ana protect, the Bank Com
missioners forwarded the following as of the
date OF November 8, 1894.
The letter which is quoted says that the
Commissioners believe that the bank will
with ludicious management pay the de-
positors in full, and with it was inclosed q
report on the condition of the bank dated
October 10, 1894.
Mr.. Clunie goes on to say:
the one previously forwarded to the Commits
sioners by Dunsmoor and herein before in
serted and showed assets valued at $3.50 1873 03,
against Habllltles TO the same amount The
letter of the Bank Commissioners shown to the
depositors seems to have had the desired eff
feet.
Mr.. Clunie then says that no important
movements are recorded by the Commits
sloners until April 5, 1895, when Commits
sioners Fuller ane Magee reported the
banks assets as valued at $2O2, ,738, and
liabilities the same amount, and sent this
report with note of transmission simply
to the Attorney-General, and, dated May
q, is a letter among the records of the
commission signed by committee of de-
posltors OF the Merced Bank which states
that they were appointed to ascertain if
there could be receiver appointed. The
letter which is quoted recites that they
find that the bank is insoIvent, with liza
bilty of 1888, 600, and but $S1 900 of good
assets: lnaL since closing there has been a
trading of accounts with a few favored per-
sons that has been unfair and unjust TO
the other depositors, and that during the
following six months would be the best
time to settle the affairs of the bank. The
letter concludes by asking that receiver
be appointed, because the management of
the bank was very unsatisfactory. re-
port accompanies the letter.
Mr.. Clunie continues:
The report, in the above letter referred to, is
that of Mr.. r. Graicy, and will be here inserted
in full. 1t is but fair to the Bank Commits
siopers to say that the same does not bear the
file mark of their Office until September H.
1885 How much sooner they may have ac-
tually seen it is matter of surmise, but GER
tainly knowledge of it was conveyed to them
by the foregoing letter early as May 27.
Mr.. Graicy's report states that the
cashier reported April %, 1895, that the
assets were 500, ,209 60 and the liabilities
the same; that he (Mr. Graicy) after care
full examination finds that the value OF
the assets is but $751; 602 so and the liabili-
ties $205, ,779 10; that the liabilities, less
the capital stock, is $157,779 10.
Mr.. Clunie then quotes the answer OF
the Commissioners in which they state
that under the act creating the board the