The San Francisco call., 1898-02-12
Gibbons Relations With the Los Angeles City
 Bank.
A Political Purifier Whose Own Record Is Now Being
 Scputinized.
Shady Transactions in Connection With a Most Sensational
 Failure.
Special Dispatch to The Call.

LOS ANGELES, Feb 10-Eve
 since the failure of the City Bank il
 June, 1893, mystery has attached t, the relations that existed between ] that institution and Thomas F.. Glib ! bon. Rumors of the most sensationa
 character have been afoat in this re
 gard. On the Fist of June the banl | went into the hands of a receiver | Otto Brodtbeck. Its liabilities at tht time of the failure were about $1S5, GOO 1 Of this amount about S115,000 was un 1 secured. On this sum, through the | good management of w. J. Wash | burn, who succeeded Brodtbeck as re- celver, after the bank had been ir
 liquidation for about three months dividends have been declared in the 1 aggregate to the extent of 221a per cent. MT. Washburn is now preparing his final supplementary report, the ac- ceptance of which will be followed by his application to be discharged from the duties of receiver of the City Bank
 From evidence at hand it appears that Attorney Thomas E. Gibbon, one of the most active spirits in the League for Better City Government, an organization which pretends to stand for all that is good in public af- fairs; who holds the honorable and re- spons1bIe position of Police Commis- sloner; who. presumably because of his moral and political integrity, was selected to carry on the prosecution in connection with the School Board cor ruption; who in the latter capacity has been displaying his oratorical abilities in delivering homilies on pub hc morality; who sought by his per Sonal Influence to have a teacher re- tained in the school department for which position she had shown herself to be disqualified-this same Thomas E. Gibbon, who was most aggressive in the bounding of School Director Webb; who is one of the guiding in- Huences of the Herald, which has sought to betray the people in their contest with the Los Angeles City Water Company-has been guilty of an act similar to one that Circuit Judge Ross of this district has char acterized as nothing less than an at tempt ito enable the bank officers to make deceptive and therefore fraudulent showing of assets
 The offender in the case referred to d a brother of the bookkeeper of the bank for whose benefit the fraud was prac- tlced. Gibbon, as already stated, is an attorney, and at the time he lent him. self to the transaction under discus sion was the legal adviser of he men, who organized and afterward wrecked the City Bank
 The City Bank was organized on July 25, 1889, according to the books turned n ha 0f defunct institution. The principal stockholders in the bank were ". T. and A. D. Childress. Among the assets or the institution was a note for S5000 made by T. E. Gibbon. The following. which is copy of a secret agreement entered into between the Childresses ana Glbbon, throws some light and some mystery on the note in question: This agreement, made this 18th day of July, 166S, by and between W. T. and A ?; Childress of the first part and T. E. Gibbon of the second part wftnesseth: That the parties of the first part have this day sold and assigned to the party of the second part four hundred shares of stock in the San Felipe Land and Water company, corporation, for the sum of said party of the second part has this day executed to said parties of the first part his note for the sum of five thousand dollars (s5OO0), payable at ninety days.
 
 per cent per annum from date.
 Now, in consideration of the purchase by. the said party of the second part of said stock, and the making of said note by him to the said first parties, with per mission to the said parties of the first part to use the said note for certain pur- part desire to accomplish, the said par ties of the first part hereby promise. agree and bind themselves to and with said party of the second part to pay all cold or any renewal thereof, to pay all assess ments for corporation purposes and all taxes that are now due or may. hereafter become due on said stock and to protect said note by securing the extension or of the same or by paying the same if necessary, should the same come such time as he, the said party of the second part, shall be able to sell said stock and realize sufficient funds from such sale to pay said note. together with all other sums paid out by the said first parties on account of interest thereon and assessments and taxes on said stock.
 The said party of the second part, in of the foregoing, has this day purchased said stock and given his note as above set forth to be held and used by the said parties of the first part. and he further agrees and promises that when said stock Is sold he will pay over 10 the said parties of the first part two thirds (2-3) of the net profit realized upon the said stock, after deducting from the PllSc oiio PoyiiS eo tHo Seaiu first parties the principal of said note. | together with all interest due thereon at that time and all sums which the said first parties may have paid out for ac- ,rued interest and assessments and taxes | on said stock.
 In witness whereof, the said parties l nave hereunto set their hands and seals | the twenty sixth day of July, year first | above mentioned.
 w T. and A. D. CHILDRESS,
 T. E. GIBBON.
 Neither at that time nor at any time since has the stock of the San Felipe | Land and Water Company been of any value. This company was | organized with capital stock of $250,- | 100, consisting of 2500 shares. Among he assets of the City Bank when it | 'ailed was block of 250 shares, which | were sold by the receiver on May IT, | S97, for s25. At this rate the 400 shares | 'or which Gibbon gave his note to the | for s5000 Were worth $40.
 A very similar transaction is dis | .ussed in the Federal Reporter 69 page | I60. in a decision rendered by Circuit | fudge Ross on August 12 1895.
 This was an action at law by Fred .rick N. Pauly, receiver of the Cali 'ornia National Bank of San Diego, against J. E. O'Brien on a promissory note made by the latter to the bank. The defendant, at the instance of the of the hank gave a pota