The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-06
Frank Planned the Robbery
of Six Hundred Thou
sand.
Securities SeCreted Where the Con-
spirators Could Steal
Them.

The Call concludes this morning the
dramatic history of the ruin of the Peo-
pies Home Savings Bank as Frank V
Mcdonald, one of the leading conspira-
tors, saw the inception, the develop
ment and the conclusion of the wreck
The story as Frank Mcdonald saw it is
only a phase of the great disaster, but
as he tells it the public knows for the
first time that the leading members OF
the conspiracy escaped exposure until
now. In the concluding letters of Frank
Mcdonald, j. E. Farnum and NJ. II.
Sherman play a most conspicuous part
Both of these men were criminally in
collusion for nearly two years before
the bank failed. They had behind them
the potent influence of w. II. H. Hart,
who was then Attorney General of this
State, and at least the connivance of
one member of the Bank Commission.
In the letters published this morning
the Call proves that the books of the
Pacific Bank were manipulated just as
the .conspirators pleased. Accounts in
these institutions were used to suit the
convenience of the schemers. If a loss
were incurred in one disastrous venture
it was charged to whatever account
the conspirators cared to choose. As
the existence of the two big institu-
tions neared the end Farnum and Sher-
man, cousins and friends, foisted upon
the savings institution securities that
both knew to be worthless. Both con-
spirators knew at that time that at
least two members of the Bank Com
mission We're at their command. The
influence of relationship and of favor
had been exercised to the last degree.
Sherman had worthless bonds to place
and Farnum was in a position to place
them in exchange for the money that
thousands of poor people had intrusted
to his care.
The letters that are published this
morning Will show that Shermans
phantom electric railway of Phoenix
offered an excuse for the practical rob-
berry Of many thousands of dollars from
the Peoples Home Savings Bank
These documents will prove that the
manager of Il ; Peoples Home Savings
Bank and the crafty manipulator Of
Los Angeles We're playing a desperate
game and played with such cleverness
that the inevitable result was the clos
ing of both banks.
In this gigantic scheme w. H. II.
Hart was the willing tool of both con-
spirators, and in his willingness Sue
ceeded N getting out of the bank into
his own private Golfers many thou
SANDS of dollars. The letters show, by
indTection, that the McDonalds. forced
into a desperate situation, were COM
PEELED to submit to the commands Of
Farnum and Sherman. The deluded
bankers had gone so far that they
could not retreat They had placed
themselves in the power of Sherman,
Farnum, Hart, Dorm and Johns, and
they had to accept the conditions of
financial existence that these men die
tated. The result was inevitable. In
order to save the Pacific Bank the Nc
Donalds had to rob the Peoples Bank,
and Frank Mcdonald became so
shameless in his thievery that he out
lined explicitly to his brother how the
savings institution was to give up its
money to feed the commercial bank
and maintain it in its awful plot Of
tremendous robbery. In this aspect
the letters that are published this
morning are perhaps of more vital i'm
portance than any which have hitherto
appeared before the public.
In one of his letters Frank reaches
an awful dignity in crime when he de-
clares that as soon as money comes
into the Peoples Bank 1t must at once
be transferred to the Pacific for what
ever use that institution may care to
put 1t. Under such pressure and sur
rounded by such influences even the
McDonalds saw the end. With the in
stinct Of self-preservation Frank Nc
Donald schemed to save an enormous
private fortune out of the wreck. With
that end in view he planned the organi-
zation of a trust company that was to
serve as mask for further thefts.
Under his guidance and with the as
sistance of ex-Attorney General Hart
a great corporation was to be organ
lied and all of the available assets OF
the Pacific Bank were to be stolen and
placed where they could be carried
away at a moments notice. Frank
Mcdonald estimated these assets to be
worth $500. 900, and he counseled his
brother Richard to place these securf-
ties in a secret box that could be car
ried away whenever the conspirators
choose to take it. There is in the his
tor of financial dishonesty probably
no parallel to this appalling crime.
MANIPULATING THE BOOKS TO
CONCEAL THE FRAUDS.
On April %. 1Ss3 Frank Mcdonald
outlined further plans by which the Pa
cific Bank was to be robbed. the Bank
Commissioners to be deceived. worth
less notes made and DR.. McDonald's
property saved from the legitimate con-
sequences of his own neglect and the
dishonesty of his sons. Frank wrote
as follows: ~
April %. 1893.
My Dear Brother: It has lust
occurred to me that possibly
II might be better when YOU sell
the electric light stock of fathers to
charge his account with five thousand
and accrued interest TO date and trans
fer to him personally another 15O
shares p H s. 3. stock and cradif