The herald., 1897-05-06
THE INVESTOR
CONDUCTED BY GEO. A. DoBlNsoN
OFFICE OF THE HERALD,
Los Angeles, May 8, 1897

OFFICE OF THE HERALD.
Los Angeles. May s, 1887.
Upon the necessity for rigid bank in
spection as illustrated by the recent big
failures in Chicago. the Times Herald Of
that city says as follows:
1.-THE gradual unraveling Of the tangled
affairs Of the defunct Globe Savings
bank and the embexxlenient Of $446,000
Of state university funds by the former
president OF the bank prove beyond any
reasonable controversy that the bank
was wrecked by Governor Altgeld and
q half-dosen men closely allied with him
who were heavy borrowers and were un-
able to meet their obligations. The tee-
timony of the cashier, given before the
senatorial investigating committee.
shows that at the time the bank closed
its doors over $4,000 due 1t directly or In
directly from Governor Altgeld had been
charged up to profit and loss by the state
bank examiner. 1t was also revealed by
the testimony OF the witnesses examined
by the committee that a combine OF
closely allied manipulators Of bank and
university funds, including Altgeld and
spalding. owed the bank at one tinse In
1892 the sum Of $284.925, although the
capital stock Of the concern was only
$200, 1000.
"The collateral held by the bank to Sc :
cure these loans was insufficient and of
acharacter that would have excited pro-
test had 1t not been for the reluctance Of
the state examiner and the state auditor
to question the integrity of men for
whom the governor Of Illinois was
sponsor.
1.-THE deplorable results Of this kind Of
banking need no elaboration at this par
ticular time in Chicago. The failure Of
the Globe Savings bank. however, af-
fords a conspicuous example of the in
adequacy of our system of state bank in
epection. Mr.. Altgeld secured the ap-
pointment of Spalding as treasurer OF
the board Of trustees of the state univer-
sity so that he might borrow of him the
funds intrusted to his keeping, to help
relieve him OF embarrassing financial
difficulties that had overtaken him. Mr..
Epalding was then treasurer OF the Globe
Savings bank and Mr.. Altgeld was Sec
ond vice-president. Mr.. e. S. Dreyer,
who was appointed treasurer Of the
West park board upon recommendation
of Governor Altgeld, was a defaulter to
the amount of $318.000. AS soon as he
was appointed 1t appears that Governor
Altgeld also became his debtor.
"The remedy for these fragrant viola
tions of public trust lies in the enactment
of the Merriam bill, making 1t a penal
offense for using the interest on state,
county. municipal or park funds, and in
the passage Of bank inspection law SO
tn itc fcio k1,o<
even a governor of Illinois cannot filch
the savings of the people. The tears
which Mr.. Snalding is shedding in the
Cook county jaxl offer no hope Of restitu-
tion to the plundered depositors in the
savings bank. His incarceration does
not recompense the university of Illinois
for the losses 1t has sustained through
his perfdy. The legislature should enact
laws that will protect the depositors and
the state institutions from the results
OF official rascality."
Real estate transactions in San Fran
cisco city and county for the month of
April are reported in the Real Estate
Circular as follows: Two hundred and
eighty-five transfers, aggregating $685.
SS9. In the same month there were 377
gate of $1.024,S12; and 229 releases, COW
ering $710.022. The comparison of these
figures with those for Los Angeles dur
ing the same period, which were given in
The Herald's Investor COLUMNS on the
I'd inst, is quite instructive. While the
total consideration expressed in the
deeds was only $S3,611 in excess Of those
for San Francisco. the most noteworthy
fact Is in the activity indicated by the
contrast of the Insignificant total of 2S5
transfers in San Francisco against 2009
In Los Angeles in the same thirty days.
Speaking of the condition Of the real
estate loaning market in San Francisco,
the Circular further says: The situation
of the past six months continues at the
savings banks: they have much more
money on hand than they can lend on
city real estate; they are not lending in
the country; they have not reduced, but
they should, reduce their rates OF inter-
est. The rates are still 61a per cent a
year at the Hibcrnia bank. and per cent
at the other banks. they all paying the
mortgage tax. Rates on country loans
at country banks are very high, and have
been so since city savings banks stopped
lending there. now four years ago. Rates
then were ~ to s per cent; now they are
8 to II per cent. Country borrowers are
not likely to grow rich at these interior
rates for money.
One of the difficulties encountered by
the fire insurance companies is found in
the universal disposition of the public
to jump to conclusions. Everywhere the
confident assertion is made, says the
Chicago Argus, that rates have been ad-
vanced as the result Of combinations
among the companies, and the various
attempts at antitrust legislation, many
Of them successful. are based on the err
roneous belief that increased rates are
the rule and decrease the exception. How
far astray the guessing public 10 on the
subject of higher rates Is strikingly
shown by the Official figures of the New
York report. now accessible. That report
SHOVE that the 1873 joint stock compan-
iee which reported for 1896 wrote $14,-
3e7, ,695. 1888 Of fire insurance, on which the
premium charged was $153, ,547, 1894, Yield
Ing q rate Of LOT. The 121 joint stock COM
panies reporting for 1895 wrote fire in
surance amounting to $14.S2S. .012, ,724, the
premium charge being $156. .278, ,s81, maxi
ing the rate 100. That is, on nearly the
49,