davidaulloa/AmericanStories huggingface dataset:
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07
He Betrayed Thousands Of Depositors
Into the Hands Of tbe
Conspirutors
The Aged Banker Played q Dubious Double Part in
the Destruction Of the Peoples Savings
Bank dDd tbe Pacific

In the history of the ruin of the Pa.
cif1c Bank, The Call begins this morn
Ing the publication of the letters Of DR.
r. H Mcdonald. In December, 1891
DR.. r. II. Mcdonald fed from this city
to evade the consequences of his OWL
crimes and those Of his sons. Before
he fed he promised the Bank Commits
sioners that he would piedge his
private fortune to save the institutions
with which he was so prominently con-
nected. Instead Of keeping his prom
ises he did everything in his power to
divert his property from any channel
wherein the depositors might use the
courts to demand restitution. The aged
banker went to New York, and while
there kept himself closely in touch with
the affairs Of the institutions that were
fast drifting on to the rocks Of finan-
cial distress.
The letters of R H. Mcdonald Sr.
present a dramatic story Of a tragedy
Of finance. The old man in the latter
part Of 1892 and the first half of 1898
was battling against the wreck Of his
fortune and almost of death. In the
greatest bitterness of heart he dis
cusses his private affairs, warns and
counsels his children. reminds them Of
their duties and obligations toward re-
lgion and begs them to accept the
warnings in time. In the old mans
letters is the record of the terrible
struggle Of the family to free them
selves from the human parasites
that were sucking their lives and
dragging them down to ruin. In
letter after letter written from New
York, where for nearly year and a
half the elder Mcdonald was prac-
tically il hiding, Dick is urged to brave
the storm that was battering the
family TO death. In the latter days of
the conspiracy the elder Mcdonald
seemed mad with grief that his for
tune and his honorable name should be
crushed.
In letter after letter the aged moral
ist discusses the beauties OF a truly
Christian life and then asks his son to
steal ten thousand more from the bank
At one moment he cries out that all
must pull together for the shore and
reach the end Of the banks career
honorably If not a dollar is left at the
end. Again he cries despairingly that
'if my children go to hell, they will
go there knowing better" In the bit
terness of remorse the father of Dick
Mcdonald tells his son that it cost him
100000 to get rid Of Clara Belle Nc
Donald, the wife of Dick. Turning
again to the dreadful affairs of the two
banks, the old man in warning terms
says Eve are surrounded by schemers,
traitors, vagabonds, thieves, and by ali
means don't trust that Jew, Moses
Sherman" Throughout the story Of
these letters reveals the conspiracy of
financial manipulators, the domestic
miseries and love entanglements of a
once honored family. the corruption of
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07

an odor of gas from the corridor adjoin-
ing the Supreme Court room. Not being
able to locate it he proceeded to Statu-
ary Hail-the old hall of the House
of Representatives. the gas
might be escaping from burner in
that vicinity. While he was endeavor-
ing to locate the escape Of the gas the
explosion occurred.
Only a few persons, principally off,
GERS of the Capitol police, were in the
building at the time, but several Of
them had narrows escapes. Before the
fire department, which responded to
an alarm sent in by policeman three
squares from the Capitol, had arrived
C. P. Gliem, chief electrician Of the
Capitol, and H. w. Taylor, chief en-
gineer of the House side, had a stream
playing into the Supreme Court record
room, which by that time was a roar
ing furnace Within a few minutes
after the arrival of the fire department
the flames were under control, although
as a precautionary measure streams
were poured into the marshals office,
the library and the subterranean base
ment for two hours.
The firemen were unable, however,
for a considerable time to extinguish
the flame of gas which shot out of the
four-inch main in the meter-room.
From this main the fire swept through
an orifice in the basement floor caused
by the explosion and attacked the con-
sultation-room of the Supreme Court
Justices on the main floor. Some dam
age was done to the furniture and fit
tings Of this room, but 1t was incon-
siderable as compared with that done
elsewhere The robing-room sof the
Justices practically escaped damage.
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07

It was evident that the fire could not
be extinguished until the gas from the
main was cut off, That this might be
accomplished the firemen turned two
streams upon the main, choking the
flow of gas and at the same time cool
ing the pipe Electrician Gliem. brav-
ing the intense heat, entered the meter
room and shut off the gas at the floor
valve of the main. Throughout the
lower central portion of the old Capitol
building doors, windows and fittings in
common rooms and other apartments
are badly damaged.
Just north Of the crypt an archway
almost over the meter-room was COM
pletely blown out and masses OF ma
sonry were hurled to the ceiling with
such force as to burst the stone and
plaster of the walls above. Ponderous
pieces were wrenched from their places
and throughout the corridors the fres-
Going on the ceilings and walls were
utterly ruined. No damage was done
to the main foundations of the building.
as these are of solid masonry, deeply
imbedded and twenty-five feet four
inches thick.
The electric lighting apartment, In
cluding dynamos, boilers and wir-
ings, was not damaged. In order to
enable the f1remen to work without
peril from live wires Electrician Glieni
cut off the current from all wires ex-
cept one circuit which lighted the
lower western part Of the building.
Within thirty feet Of the scene of the
explosion a solitary incandescent lamp
marking the exact center of the Capitol
structure and hanging directly over the
bier in which it was proposed to lay the
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07

as to seem practically simultaneous
with 1t. The explosion shook the i'm
mense structure to its foundations and
was heard several squares from the
Capitol. 1t occurred in a small room
tightly inclosed by heavy stone walls
In the subterranean basement imme
diately below the main entrance to the
old Capitol building. In this room was
6O0-light gas meter, which was fed
by four-inch main. Very little gas
Is used in that part of the building,
but at the time Of the explosion the
gas had not been turned off at the
meter. The meter itself was wrecked
and the gas pouring from the main
caught fire. The flames originating
from the explosion darted up the shaft
of the elevator, which had been COM
pletely destroyed by the force of the
explosion, and communicated with the
record-room Of the Supreme Court, the
office of the marshal Of the court and
the Supreme Court library. Before the
flames could be subdued the priceless
documents in the record-room had been
almost totally destroyed and serious
damage had been done in the marshal's
office and some minor rooms in the
immediate vicinity.
The library Of the Supreme Court, To-
Gated Immediately beneath the Su-
preme Court room, was badly damaged
by fire. smoke and water, practically
destroying the great collection of law
reference books. The library contains
about 10000 volumes and was used not
only by the Justices Of the Supreme
Court. but by members of Congress
and lawyers practicing before the Su-
preme Court.
Mr.. Justice Harlan said tonight that
the library was very valuable. Many
of the works it contained would, he
thought, be difficult to replace. Ii
brartan Clarke, after a cursory ex-
animation necessarily made by the
light of lanterns, expressed the opinion
that many Of the books could be saved.
although they had been drenched by
water from the streams poured into
the library for two hours or more after
the explosion occurred.
The most serious damage, IN the
opinion of the Justices Of the Supreme
Court. is to the records stored in the
basement. These included all the
records Of cases and opinions rendered
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07
THE MONEY OF THE BANKS
POURED INTO A BOTTOM
LESS SACK.

If any of the friends of DR.. r. H. Nc
Donald have lingering hope or belief
that the old man was ignorant of the
condition of his bank, the following
letter that was written from New York
on September 26, 1892, will destroy the
hope and dispel the belief:
My Dear Son Richard: I hope you
are doing all that can be done to keep
the Pacific Bank in a prosperous con-
dition and that she may pass safely
over the rocks among which she is
now passing. You make no mention
whether you have sold the MADEIRA
Bank or not. hope you have. I am
more afraid of that MADEIRA property
than anything we have. It to me is
like a sack open at each end. Pour
money in at the top and it is lost be-
low, or the tendency is dangerously that
way. If the bank is not sold l fear it
will greatly reduce the value of our
bank. Now, hope you will be able TO
get together the odds and ends of the
Pacific Bank and that it may come out
all right and that you and Frank will
learn valuable lesson Affection
' X. H MCDONALD.
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07
DR.. McDONALD'S BITTER DENUN-
CATION OF l. E. FARNUM

On August 25, 1892, DR.. Mcdonald
wrote an important letter to his son.
Richard. This document shows clearly
how the Pafific Bank was conducted
,sad indicssttf sssset sxl.iid Esave 1sgi5ea-
Cd to J. E. earnum if1he had not sub
nnitted to the control OF the McDonalds
-eather and sons. FArnum was COM
manded at this time to do as he was
told, 10 be servant and not dictator.
That part of the letter which is perth
nent is as follows:
NEW YORK, August Is, 1892.
My Dear Son Richard: You say IN
one of your letters that the Peoples
Home Savings Bank statement makes
a fine show, but don't forget, my boy,
that for nearly a year we have done
a large amount of advertising in one
or another form, and to an extent of
than all others combined is due the
good showing of the savings bank,
and now that the advertising is
stopped you will see the business is
running down from week to week, and
the cry comes up ''hard times and bad
business" Now, bad business is not
the cause: 1t is on account of the
stirnulant given the bank In the way
of our regular advertisements. And
you viii see, unless attention is paid
to 1t, we will be in an old rut just the
same as other slowgoing banks in our
city And just about as well, and
want to prevent that If I can in spite
of the bullhead course that some of
the directors seem disposed to take
and force upon us on that subject. 1t
is much easier TO keep the business
going when in a prosperous way than
it is to let it run down and then COM
mence to build 1t UP again, and do
not want to lose the effect OF our mo-
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07

HAVANA, Cuba, Nov. 6.-The yellow
fever situation here is causing great
anxiety among the American officials.
The increasing number of cases. the
majority of which are of a serious ma
ture, has alarmed the entire American
colony, and the announcement to-day
Of two new victims caused the alarm
to develop to almost the character of
panic. The disease apparently is
spreading rapidly and is not confined
to the Vidado district, where Captains
Foraker and Beebe were stricken.
The outbreak of the disease in the
quartermaster's department has tenn
porarily disorganized the work of the
Office, which has charge of the erection
of camps and making preparations for
the reception Of troops. AS matters
now stand, it scarcely seems possible
to get them ready by December 10, the
latest approximate date yet named.
Colonel Smith of the Commissary
Department, who arrived yesterday,
took charge of the chief quarter
masters Office this morning IN place or
Colonel Williams, now Ill.
Immune nurses especially are re-
ouired, as well as properly equipped
Isolation hospital DR.. Laine regards
the situation as grave. The conditions
in Havana, military officers believe,
will be no better in December and
january than they are now.
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07
DISASTER AT WASHINGTON
ONE PORTION OF THE Capitol
BUILDING LAID WASTE
Priceless Records Of the Court De-
stroyed by Fire Which I'm
mediately Followed the
Shock.
Special Dispatch to The Call.

WASHINGTON Nov. 6.-An explo-
sion and fire at 5:13 o'clock this after
noon wrecked the Supreme Court room
and the rooms Immediately adjoining
1t on the main floor of the Capitol.
The damage is enormous The entire
central eastern part Of the great mar
bic pile, from the main floor to the sub
terranean basement, practically is a
mass Of ruins The force Of the ex-
plosion was so heavy that the coping
stones on the outer walls, just east of
the point where the explosion occurred,
were bulged out nearly two inches,
windows in all that part of the build
ing were blown out and locked doors
were forced from their hinges quite a
hundred and fifty feet from the scene
Of 1t.
Fire followed the explosion so quickly
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07

by the fathers Of judiciary of the Gov
ernment. Apparently the documents
in this room are either totally de-
stroyed or so badly damaged by fire
and water as to be useless. Justice
Harlan said that while the loss of the
records was irreparable, it was for
tunate that the later records of the
court, which are kept In the office of
the clerk on the main floor, were not
injured. AS documents for reference
at this time and later, Justice Harlan
thought these were of far greater
value than the records destroyed
Fortunately the clerks office was not
in the least damaged by fire, and the
explosion did no damage In it except
to blow one window out.
James McKenney, Clerk of the Su-
preme Court. expressed the hope after
making an examination of the old room
that some at least of the documents.
priceless from the view point of the
historian, could be saved Tonight.
however, owing to the inadequate light
ing facilities in that portion of the
building where the explosion and fire
occurred, it was impossible for him to
make an intelligent or thorough inves-
tigation Of the damage. The Supreme
Court room was damaged principally
by water and smoke, the fire not reach
ing that point. Adjoining the court
room, however, both the marshal's office
and the Senate barber shop furnished
food for the flames.
While many theories are offered as to
the cause of the explosion 1t seems be-
yond doubt to have been due to escap-
ing gas. AT 5:07 o'clock Lieutenant
Nelson of the Capitol police detected
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07

! officials high in the State and the de-
liberate robbery Of thousands Of men,
women and children.
DR.. Mcdonald fled from San Francisco
in December, 1891. In August of that
year the Pacific Bank was insolvent
the Attorney General and commanded
DR.. Mcdonald and his sons to rehabili-
tate the Pacific Bank and stop it's aw-
full drain on the Peoples Bank. DR..
Mcdonald tearfully promised the Bank
Commissioners that he would sacrifice
every dollar of his private fortune to
place his banking institutions again on
a sound financial foundation. Having
made that promise he fled from the
State to evade it's fulfllment. From
that time on until the crash on June
%, 1898, DR.. Mcdonald was supposed by
the authorities and the public to know
nothing OF the affairs of the institu-
ton of which he was the president
When the Pacific Bank failed he was in
New York, and, with the same fund of
tears to moisten his assertions, en-
phatically declared that from the time
he had left the city he had taken alb
solutely no part in any transaction re-
lat1ng to the banks. AS a matter of
fact, when not prevented by illness, he
was intimately concerned in ali the
Eastern manipulations. At his sugyes-
ton his enormous debt to the Pacific
Bank was released by a crime; his
property was fraudulently decided and
hypothecated until it was placed be-
yond the reach of execution. On one
occasion Dick was commanded to take
$1,000 and on another $1,000 for the per-
sonal incidental needs of his father.
And when the crash became inevitable
the old man himself, over his own sig
nature, told Dick to steal $40, 900 more,
so that the doctor might have living ex-
penseS for six months. The letters will
be found interesting and perhaps valu-
able in any effort there may be made
to recover the stolen property of the
banks
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07
eorge Washington burned

| remains of George Washington burned
] brilliantly.
Among the losses which VIII be most
sincerely regretted are those of busts
| of Chief Justice Marshall and other
distinguished members of the Supreme
Court which were arranged on small
pedestals about the Supreme Court
chamber. In the smoke and ruin which
followed the explosion these invaluable
works of art were either badly dam
aged or who. destroyed, and with
their destruction the country has suf-
fered an irreparable loss. Many Of
them have been treasured exhibits In
the Supreme Court chamber for half
century.
The Capt building has been dam
aged number OF times before by fire.
but it is believed to-night's fire will
prove to be the most disastrous in the
history of the building. On two occa-
sions prior to this fires have been start
ed by explosions of gas. Seventeen
years ago a large amount of damage
was done to the same part of the build
ing by an explosion of this kind, and
in 1876 there was an explosion of gas
that killed two men and came near
killing another.
No intelligent estimate of the money
loss by the explosion and fire can be
made yet. In the opinion of the Capitol
officers and mechanics who examined
the structure tonight the loss will
reach probably 100000 to the building.
The loss on the library and records,
as stated above. can scarcely be esti-
mated in dollars and cents. A million
dollars couC not replace them, because
of many of them no duplicates are In
existence.
Arrangements were completed to-
night by Librarian Clark of the Su-
preme Court and Colonel Richard
Bright, sergeant-at-arrns of the Senate,
by which the sittings OF the Supreme
Court will not be interrupted. The
court will convene Monday in the room
of the Senate Committee on District OF
Columbia, one of the most spacious
rooms in the Capitol. How long the
sessions of the court will be held there
will be determined by the Justices
themselves
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07

On January 81, 1892, eight days after
the foregoing letter was written, DR..
Mcdonald was in New York and the
little band of schemers and manipula-
tors had already assembled there. w.
III. Eastland, A. r. Johns, NJ. H. Sher-
man, o. T. Dyer and DR.. w. Jenning-
son surrounded the old man and began
their batteries and Misrepresentation.
DR.. Mcdonald had received a letter
Peoples Bank, and in answer to 1t,
wrote his son Richard as follows:
1 had quite a long letter from Mr..
tarnum. He thinks the changes in
the financial board of the Peoples
Home Savings Bank were not wise at
several reasons for this view of the
situation and says, among other
things, that there are some innuendoes
afioat as to the condition of the Pa
cific Bank, and he intimates the pos
sibility of some danger ahead. He
writes me in very kind and faithful
manner and l think means truthfully
and well in all he says. Is IT not awful
to get into such a financial condition
as we seem to be at the present time.
Mr.. Johns has always expressed the
the John Brown and MADEIRA property
to advantage and coming out with a
property / think / would like to give
him $50, 900 to insure US out of that diff
ficulty, and that would be the extent of
our loss in the enterprise. | have now
no confidence in the Dyer matter or
the Los Angeles electric road. Taking
all together the Pacific Bank has the
widest circle and the greatest variety
of business on its hands that / have
ever known. And for your considera-
will state they never would have hap
pened If there had been the proper
confidence, consultation and consid-
Grafton between you and Frank as
we'll as rnVSelf.
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07
THE PURCHASE OF CLARA BELLIES
DIAMONDS.

After the writing Of the foregoing les-
ter DR.. Mcdonald remained for long
time silent. He had been very i'll and
was compelled to seek the relief that
he might find at various resorts. On
August 8, 1892, he was at Catskill, New
York, and wrote a letter in reference to
the purchase of Clara Bellies jewels by
Dick. The old man did not think well
of the purchase and wrote:
/ see by a telegram in one of the
papers here that the Clara Belle jewels
have been sold for little over $4,000
to pay the debts of creditors and that
you are again probably the purchaser
and hold them. If you are the pur-
chaser hope you will get them out of
your hands or have 1t understood that
you now have no connection with them
as 1t will attract public attention and
criticism such as / hope you do not
want If it can be avoided. If you have
the jewels / hope you will break them
up with little expense into other forms
so as to avoid Identification as much
as possible.
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07
DR.. McDONALD'S FEAR OF THE
BANK COMMISSION

A few days after DR.. R. H. Mcdonald
fled from this city his interview with
the Bank Commissioners was still on
his mind, and from San Bernardino on
January %, 1892, he wrote in part to
Frank, his son, as follows:
I am desirous Of knowing the result
of the interview you were to have had
or did have with the Bank Commits
sioners growing out Of the note sent
us from them the day before left the
city to come here. I doubt If I will
ever again enjoy the health I us
ually have had. Three score and ten
hangs out her sign to say you are
nearing. the end of that great un-
known beyond, from whence no trav-
eler has returned to bring us the
news, but where triumphant faith
leads US on to a higher and better
place.
The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-11-07

has been saved from ruin and carried
forward with marvellous success by
the course pursued, and / don't intend
a set of impecunious fellows to run it
into a rut and stunt its growth. and
that IS Just what is being done now.
l look upon your interest in the
Californian Magazine enterprise as sure
to turn out with a loss, and how much
depends mainly with the length of time
1t runs, in my opinion. And you don't
want a disgraceful bankruptcy of it,
the main notoriety and disgrace of
which is sure to fall upon you. If I
could have known your thoughts think
! could have kept you out of it by
showing you its uncertainty and dan
ger, but you do every such thing in
secret / regard that John Brown
colony business as the most danger
Gus affair we now have on hand to-
gether with the Bank of MADEIRA.
Frank says he has consented that Mr..
Farnum shall sell some party $50 900
worth of p. H. S. Bank stock and
then make the man president of that.
I am opposed to anything of the kind
and L want all such pledges declared
off. Neither he or you or any one
else has any right on your own re-
sponsibility to make any such ar
rangements and | will insist on being
consulted before any more of the stock
is sold or any other movement of i'm
portance is entered into. Affection
r n MCDONALD.