The San Francisco call., 1896-10-02
A DAYS TURN IN
A BANKS ASSETS
It Leads to an Attempt to
Recover a Large
Sum.
Captain Jim" Is Asked to Help
Pay Seventy Five
Thousand.
SOMEWHAT SENSATIONAL SUIT
The Attorney General Wishes the
Bank Commissioners to Join in
the Proceedings.
SOMEWHAT SENSATIONAL SUIT

Andrew ]. Clunie, as attorney for P. f.
Dundon. depositor in the Pacific Bank,
will try to demonstrate next Monday In
Judge Sewall's court that the depositors
of that institu ton are entitled to recover
SIS, 900 from James M. Mcdonald and the
directors of the bank. The allegations
made by Mr.. Clunie in this suit are in
substance as follows:
That james M. Mcdonald on August /,
1895, caused $50 bonds of the par value of
$1,000 each, or $150,000 in total, to be sold
for $4,000; that the purchaser was s. 6.
Murphy; that on the succeeding day,
namely, August 2, 1895, S. G. Murphy di-
rected the Bank of California, which was
the depository in which the bonds in
question were all held, to deliver the
same to James Nj. Mcdonald; that, as
matter OF fact, the bonds were worth par,
or $150,o00, and that Captain Mcdonald in
this transaction really cleared up $4,000
by turn in the securities of the Pacific
Bank for his own profit; therefore the
court is asked to award $75, 900 to the de-
positors, of whom P. F. Dundon is one.
The somewhat sensational nature of this
proceeding is increased by the action
which the State of California, through the
Board of Bank Commissioners, may take.
Attorney-Gener Fitzgerald has consid-
cred the facts which have been presented
to him and advised the Bank Commission
ers to join with the depositors of the bank
in this attempt to recover SIS, 900 from
Captain Mcdonald.
The general facts connected with the
alleged transaction possess interest for the
Pacific Bank depositors. and perhaps not
less for the public at large. S. G. Murphy
at the time the bonds. which were the
issue of the Los Angeles Consolidated
hands, was the San Francisco agent OF the
National Bank of Commerce of New 7 Iork,
to which institution the Pacific Bank owe d
500, 900 in round numbers.
The sale of the bonds was entered
upon the minutes of the directors of
the bank as having been maze to effect
a settlement with the National Bank of
Commerce Of New York of their claim at
something less than its face value. 1t is
alleged that when the bonds were handed
back into the custody of Captain McDon-
aid, one day after Captain Mcdonald had
transferred them to s. G. Murphy. Nc
Donald paid over $4,000, which went to
New York and left him in possession OF
the 100 bonds at so cents on the dollar of
their face or par value.
Captain Mcdonald, at the time the Pa
cifc Bank failed, held abou. 100 shares of
the capital stock of that institution. He Sc
cured possession of the stock owned by
DR.. Mcdonald, amounting to 5000 shares
and this large block of stock, added to his
own holding, gave him large share of
control during the period of winding up
the banks affairs. The Los Angeles Elec-
trio Consolidated Railway bonds were. at
the time of the failure, pledged to the
National Bank of Commerce of New York.
A part of the testimony upon which Mr..
Clunie relies to establish his claim is found
in the admission of Captain Mcdonald
when he was under crosse examination be-
fore Judge Hebbard in another proceeding
connected with the bank litigation and
also upon the action of s. g. Murphy.
The defense will probably be that the rail-
way bonds were never worth par OF $1,000
each.