The San Francisco call., 1896-07-29
FIVE DISSATISFIED
BANK DEPOS|TORS,
Want to Be Members of
the Hibernia Loan
Society.
A COMPLAINT FILED.
The Directors Charged With
General Mismanagement
of Affairs.
SECRETARY ToBIN EXPLAINS.
He SAYS That These Difficulties Were
Settled in Court Many
Years Ago.
SECRETARY ToBIN EXPLAINS.


and Loan Society yesterday appeared be-
fore the Bank Commissioners and filed
charges alleging that the directors of the
bank have been guilty of gross misman-
agement in conducting that institution.
The complainants are: DR.. J. F. Gibbon,
Michael Kane. Bernard Keenan,, Michael
Sullivan and John Murphy.
The character of the charges does not in
any way reflect upon the solyency and
stability of the bank, which, according to
the statement of Bank Commissioner Paris
KilbuFn, is as firm as a rock and has more
quick securities than any other institution
on the coast.
The complaint in twelve counts charges
the management with giving $50 900 to the
San Joaquin Valley Railroad and demands
that the directors pay the money back
into the bank; that money has been
loaned on real estate over 60 per cent of
the market value, and loan of $50, 600 TO
Jacob Heyman and one of $25, 900 to p. d.
Cole are cited; making large invest
ments in bank property in excess of the
amount allowed by law; making extrava-
CANT charges for effecting loans to the
profit of the managers and at the expense
of the depositors; also:
Taking passbooks from old members and
giving them new ones, thereby defrauding
them out of their membership and the right to
portion of the reserve or sinking fund.
Removing the conditions out OF members
books, thereby cheating them out OF their
right to membership Qhe said conditions being
evidence OF membership and also their right
to a portion of the sinking fund.
The reserve fund must be divided among
members. No portion of IT has ever been paid
in dividends, as other savings banks have
done with il. They decline to make any diVi-
dends of the reserve fund, amounting now to
over two and half million dollars in easn,
which is an unnecessary protection fund-a
portion of said reserve fund should Justly be
paid out to all depositors whose money earned
it. 1t appears that the managers covet il
when they try to cut off all the old members
by confiscating their bankbooks aud tearing
ont the conditions, thereby DESTROYING eyi-
dence of membership, and enabling them TO
divide the reserve fund and bank property
among themselves at the expiration OF the in
corporation, thirteen years hence, leaving out
the real owners whose money earned it.
Besides the foregoing the bank officials
are charged with drawing double salaries,
making exorbitant charges for services,
etc. The main complaint is, however,
based upon the inability of the complain
ants to secure any part of the reserve or
sinking fund, which they claim they are
entitled to. The object of the complaint
is to have the Bank Comm issioners place
them on the membership roll OF the cor
poration.
Secretary and Treasurer r. J. Tobin
laughed when the charges were explained
to him. In speaking of the pretensions
OF the depositors to membership he said
that the matter had been settled as to
their standing years ago. The bank was
incorporated in 1859, and from then to
1864 all depositors having over $1OO Oh de-
posit were entitled TO membership as
shareholders. In 1864 the bank incorpor-
ated without capital stock.
All of the old member were invited to
become members of the new, but not
many accepted, as the bank was then a
small affair compared to what 1t is now.
In 1878 the privilege of becoming mem bers
was withdrawn. and this action resulted
in an action by Patrick Mullen, depositor,
who wanted to be a member. Judge
Thornton, now Justice Thornton, decided
in favor of the bank about 1887.
Patrick McAran began a similar action
with like results. Thus the matter of
members Of the old bank becoming men,
bers OF the new was finally settled in
court
Mr.. Tobin said that DR.. Gibbon has not
over So or 81 in the bank and the other
complainants have not much more to
their credit. I'm short" said he. "these
folks want to get slice of the banks re-
serve fund, which the courts have decided
they are not entitled to-"
In speaking of the donation to the VAL
ley Railroad Mr. Tobin said that under
the law the bank managers can dispose of
any surplus over 100000. This fund now
amounts to $3.50 900 and the donation
mentioned was perfectly legal. More than
that the purpose OF the bank to foster and
encourage just such enterprises the pur-
pose OF which is for the public's benefit.
By such transactions the bank is build
ing up and strengthening its own securi-
ties by keeping up the value Of real estate
and fostering local industries. By lust
such transactions money is kept in circu-
| lation here that otherwise would seek
other fields for investment. Therefore.
Mr. Tobin said the donation was good
business and polite investment. and cor
rect legally as well.
In discussing the matter of making
loans on real estate close TO the market
value Mr.. Tobin suggested that it some