The morning call., 1895-01-17
ViIifes the UnfOrtunates in Gutter
Language.
THEY PROTEST. IN MASS.MEETING.
Tangled Result Of the MiSmanagement
Of the Bank-WiIl Sheehan
Resign?

pervading misery OF a stormy night and
watched the proceedings of the meeting OF
angry depositors of the Peoples Home
Savings Bank last evening they must have
grieved that the poor man and his wife
and little ones should find it necessary to
cry out against the constituencies acts of
a noneyed power. The mere fact that 200
depositors of the wrecked savings bank
braved the unusual rainfall attested the
fact that to most of them their deposit was
a matter of life and death almost.
In the absence of F. Quahlman, the reg
ular president of the depositors' mass
meetings, the assemblage was called to
order by T. H. Mccarthy, the chairman Of
the executive committee. Mr.. Mccarthy
was chosen president for the evening by
reclamation and proceeded to state the
object of the meeting, which was
to receive and act upon three
reports, one from Manager J. Dalzell
Brown of the California Safe Deposit and
Trust Company to the Bank Commission
ers, another from the attorneys of the
trust company to the executive committee
of the Peoples Bank, and the third from
the trust company concerning the condi-
ton of the Peoples Bank and the methods
used in the conduct of its business.
Assistant Secretary T. S. Williams then
read the report of the trust company,
in which Manager Brown set forth that on
November u last the trust company had
begun receiving assignments of bank ac-
counts, and had proceeded to probe into
the internal affairs of the bank. When
application was first made to Receiver
John F. Sheehan for inspection Of the bank
accounts the request was met with fat
refusal with the astounding answer that
Mr.. Sheehan and the directors were
acting in harmony, and he would
not allow an inspection without a
express order from them. But Mr.. Brown
was not to be put off that way. He OBJ
tanned, through the attorneys for the trust
company, GunnisOn, Booth & Bartnett, an
order from Judge Hebbard on Manager
Sheehan for an inspection of the books
and all other privileges necessary to full
examination of the banks business.
Thereafter the work progressed more
smoothly but Mr.. Sheehan had not assist
ed, in fact had retarded, the expert en-
ployed by the trust company. Among
these significant matters the report speaks
as follows concerning the financial affairs
Of the bank:
The profit and loss account shows that for
the first ten months OF the banks business the
earnings were $1,000, expenses SIS, 700, being
a loss of $500, yet, Notwithstanding this, they
paid a high rate of interest TO depositors and
also dividend of $4,000 to stockholders To do
this a donation of $100 900 was paid by Frank V.
Mcdonald and $4,000 was derived from the
sale of Peoples Home Savings Bank stock. For
the six months ending June 3, 1889, the re-
ceiptS were $40 800 and the expenses 81 200,
leaving the net earnings for that SIX
months $500 Yet so out Of a this nd they
dividend of $4,000 to stockholders. For the
six months ending December 81, 1889, the
receipts were $34, 500, expenses SIS 900, leav-,
ing $4,000 net. Yet out OF this they paid
$15, 700 to depositors and a dividend of
$4,000 to stockholders. To make this
good Frank V. Mcdonald donated
$4,000 to the bank which, however,w was returned
to him few months later. We find that sub
sequent to December 81, 1889, fully $4,000
was credited to profit and loss account and
paid out in dividends to stockholders and de-
positors when, as a matter OF fact, the money
was never actually earned"
The communication of Manager Brown
to the Bank Commissioners was then read,
as follows:
Gentlemen: We herewith inclose you copy of
q communication and request this day for
warded to the Peoples Home Savings Bank,
and TO its secretary and manager, General John
F. Sheehan.
If the information we have received be relia-
Bile we deem it very important that no resolu-
ton of the character in our letter contained be
adopted by the Peoples Home Savings Bank
which might prevent any accounting between
that institution and the Pacific Bank. There
fore we respectfully request that careful con-
siderstion be given to this subject.
Assuring you that our desire is for a speedy
liquidation of the affairs of the Peoples Home
Savings Bank and with as little litigation as
possible, we remain, Very respectfully yours,
CAIIFoRNIA SAFE DEPOSIT AND TRUST COMPANY,
Signed: By j. DALzELL BROWN,
Secretary and Treasurer.
GUNNIsoN, BOOTH & BARTNETT Attorneys for
California Safe Deposit and Trust Company.
Then followed the report of Gunnison,
Booth & Bartnett to the executive COM
mittee of the depositors, which was as fol-
lows:
Gentlemen: We make the following report of
the work done and proceedings instituted by
us we nave carefully examined all the SUITS
which have been brought against the People,
Home Savings Bank and the directors involv-
ing the interest of the depositors in the Supe-
rior Court OF the city and county OF San Fran
cisco.
We have caused to be transcribed the papers
and the pleadings in nearly all these actions,
particularly in the action brought by the
people of the State of California, also in the
Goldtree and knight suits and also in the Sadler
suit. We have further made an exhaustive re-
search of the authorities involving the liability
of the stockholders under our constitution and
the laws of our State as well as under the laws
of the other States of the Union. We have also
examined carefully the question OF the liability
of the stockhold to the creditors in equity
action.
We have also caused to be made demand
on the board of directors for the calling in OF
the unpaid capital, which demand has not as
yet been respected by such board. Careful study
and attention has been given to various pro-
ceedings of the board of directors of the Peoples
Home Savings Bank. particularly in relation
to its affairs with the Pacific Bank A partial
examination has been made of the financial
accounts of the institution, particularly with a
view of aseertaining the amount of capital
actually paid into the Peoples Home Savings
Bank.
The California Safe Deposit and Trust Com
pany, having recently been refused an inspec-
ton of the stock books and other records of the
Peoples Home Savings Bank, commenced an
action for the purpose OF obtaining the right
which the law accorded to our client. and an
alternate writ of mandate issued made re-
turnable by order OF Judge Sanderson, the
Presiding Judge of our Superior Court, before
Judge Murphy on Friday, the 10th day of Janu-
airy. Certain of the stockholders having also
been denied an inspection of the books, one-M.
II. Grossmayer-brough similar action to OBJ
tain similar relief, and the court issued writ
made returnable on the 18th day of January
before Judge Murphy
Ano Their action was brought to declare
fraudulent and void the 1857 shares of capital
stock fraudvlently issued to DR.. William Jen-
ningson, for the purpose of controlling the
election of said institution. An injunction was
granted by Judge Sanderson, enjoiEing William
Jenningson, his proxies or assigns, from voting
Certain OF the stockholders have brought to
our attention alleged illegal and fraudulent