The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-27
Trogic Story Of q Day in
the Affairs Of the
Banks.
The McDoDoIds Ordered to Give
Up ODe Hundred ThousoDd
Dollars in Coin.


OF the Peoples Home Savings Bank
and the Pacific Bank The Call has
mentioned incidentally the name OF
John E. Farnum. This man is the
present manager of the now defunct
Pacific Bank, and The Call proposes to
tell what part he took in the ruin OF
the institutions in which thousands of
q men and women and children had
placed their savings.
Mr. Farnum's connection with the
Peoples Home Savings Bank dates, as
already indicated in The Call, from
very early period in the conspiracy. He
was placed in the Peoples Home Saw
ings Bank by his relative, NJ. II. Sher-
man. He used the funds of the savings
institution to assist his relative, Sher-
man. in every scheme that demanded
assistance. He was something more
than DR.. Mcdonald believed. He was
not only a servant of the McDonalds,
but for several years he was the dicta-
tor of their affairs. He stopped to
every dishonorable duty they demand
ed, and then having the dishonest
bankers in his power he commanded
them to do what he pleased. He sent
them money from the Peoples Home
Savings Bank in a golden stream to
the Pacific Bank in order that his rela-
tive, Moses H. Sherman, might receive
It; and when this stream seemed likely
to be stopped even by the McDonalds
he commanded the bankers by DELHI
crate and absolute threats to give what
money they had left for the worthless
securities Of Sherman.
After John E. Farnum was placed in
the Peoples Home Savings Bank as
manager he became the stool pigeon"
and outside guard of the conspiracy.
II was his duty to warn the bank
wreckers whenever the Bank Commits
sioners threatened to descend upon
them. 1t was his privilege to tell them
what the authorities were likely to do.
AS soon as the money of thousands of
poor depositors was placed in the
vaults of the Peoples Home Savings
Bank it was the duty of Farnum to
send it to the Pacific Bank. After both
institutions became insolvent this man
continued in control, and even when
the McDonaIds wished to call a halt he
commanded them to continue their
depTedations and to permit Moses H.
Sherman to foist his worthless securi-
ties upon the savings institution.
This terrible affair in which Farnum
played the leading part did not end
until long after the collapse of the Pa
cifc Bank and the Peoples Home Saw
ings Bank. When Sherman found it
impossible to keep his relative in the
Peoples Bank he thrust Farnum upon
the Pacific Bank, and there he remains
as the director and manager of what
remains to the deluded and robbed
creditors Of the institution
The events that are incidental to the
placing of John E. Farnum in the Peo-
pies Home Savings Bank and after
that in the Pacific Bank are of timely
interest. Farnum was a member Of the
Legislature when the Bank Commits
sioner act of this State was adopted.
AS a member Of the Legislature Far
mum possessed some influence, and
with that influence he succeeded in
having himself made member of the
Bank Commission. In that capacity
he became acquainted with the affairs
and private dOings Of the banks of this
State He became connected with
bank in Pasadena and familiarized
himself with banking methods. This
was long before Sherman planned his
tremendous raid on the Peoples Home
Savings Bank and the Pacific Bank.
B. o. Carr, brOther-in-law of Moses
H. Sherman, was the first manager Of
the Peoples Home Savings Bank. Mr..
Carr was an honest man and necessar-
lily was useless to Sherman. After
Sherman became a director in the Pa
cific Bank in January, 1891, he succeed
ed in securing for his relative, Farnum,
the position of manager of the Peoples
Home Savings Bank.
The McDonalds had at that time
plunged into hazardous speculation.
The funds of the Pacific Bank and the
Peoples Home Savings Bank were be-
ing dissipated in crazy schemes and
unwarranted ventures Sherman had
already involved the McDonalds and
their banks in his Phoenix schemes
and he was prepared to inveigle them
into the great Los Angeles electric road
deal. Farnum was necessary, therefore,
to the success of Shermans plot and
the man who is now manager of the
Pacific Bank was placed in full con-
troll as manager of the Peoples Home
Savings Bank. He had absolute power
in that position until the final collapse
When the end came he resigned HIS
position, under instructions, and re-
tired from the bank. Almost instantly,
man, Farnum was replaced.
The Call has already exploited the
scheme Of the Los Angeles manipula-
tor to control the liquidation of the
Peoples Home Savings Bank. Sher-
man had determined to protect his dis
reputable interests in the bank and
Farnum was selected as his agent.
When Farnum was appointed as re-
ceiver, however. those who were inter
ested in the honest closing of the bank
rebelled and Farnum had the unenvia-
bic honor Of being the receiver OF the
bank for two hours. He never obtained
actual possession and was thrown out
to be succeeded by others.
Notwithstanding this tremendous de-
feat Sherman was persistent. He still
had the Bank Commission in his power
and with the assistance of Attorney
General Hart and others he placed Far
mum in the Pacific Bank as receiver.
A series Of legal complications followed