The San Francisco call., 1898-11-28

1 give some ostensible security. Tn con- i sideration of the receipt of these cer- tificates he pledged to the Pacific Bank certain property that he possessed in 1 Phoenix, AriZ. This property at the very outside estimate was not worth more than s6000. When the coupon cer tificates of the Pacific Bank were issued to Sherman he wrote an agreement in which he promised to deed to a certain officer of the bank this Phoenix prop
 erty. This agreement was duly ac- know1edged and the coupon certificates were issued. According to the terms of the dishonest transaction the officer of the bank who had been pressed into service agreed to transfer to the Pacific l Bank the property which was to be | deeded to him.
 As already described Sherman had obtained the coupon certificates of the Pacific Bank to the amount of $500 His agreement to deed his property was sent to this city from New York and was placed in the vaults of the Pacific Bank. sherman came to this city and hypothecated the certificates. He had placed upon these documents his own indorsement, which made him person. ally responsible for the money If the bank could not pay. In his craft he recognized that this indorsement was most dangerous to himself but he was forced to sign his name in order to re- ceive the money. After he came to San Francisco he had a consultation with Dick Mcdonald and took the first steps in his scheme to recover this agreement
 He had hypothecated the certificates He was determined to recover his agreement He was then very closely in touch with at least two members of the Bank Commission. He told Dick Mcdonald that the Commissioners were threatening, with increasing insistence, to decend upon the bank and close its doors. He promised Dick that he would protect the bank if he received back his agreement to deed over his Phoenix property to the institution. Dick Me Donald became frightened and gave up the agreement.
 It is perhaps fortunate for the de- positors and creditors of the Pacific Bank that certified copy of this agree ment Is still in existence. Sherman never deeded this property to the Pa c1t1c Bank or to the officer who had been pressed into service. Before it was necessary to make this transfer the agreement was obtained by Sherman from Dick Mcdonald The coupon cer- tihcates therefore were given abso- lutely without compensation from Sher- man. He received s50000 and in ex- change gave nothing
 This transaction has been unknown to the people of this city for nearly six years and it is perhaps one of the most outrageous deals in which Moses H. Sherman was involved After if was over and Sherman had obtained the money the coupon certificates still re- mained as a menace to the Los Angeles schemer As already described his in- dorsement and personal guarantee to pay was upon each certificate, and as long al he possessed a dollar that might be levied upon he was personally re- sponsible. The failure of the bank made this responsibility absolute, and Sherman plotted after the failure of the bank to control the liquidation of the institution. He was still closely in touch with the Bank Commissioners The coupon certificates were held by outside people, who at any moment could hold Sherman responsible for the payment of them.
 Tn order to evade the satisfaction of this just obligation Sherman planned t0 control the closing of the bank l, should be remembered In connection with this outrageous transaction that the Pacific Bank had issued to it's de- positors certificates representing the amount of each deposit. These certif- cates, after the failure of the bank, be- came acknowledged claims against whatever assets might be collected Each depositor, at the request of the bank authorities, had surrendered ilis book and received his certificate. In the liquidation of the bank these cer- tifcdtes were recognized as already de- scribed as unquestionable claims. On the other hand the coupon certificates issued to Sherman were taken for what they were worth. They did not hold the same relation to the bank as did the regular certificates issued to depositors.
 If the coupon certificates could not be paid by the Pacific Bank Sherman would have to satisfy each obligation. AS a matter of course he determined not to do so, and in order that he would not be compelled to repay this money he plotted to manipulate the liquidation of the bank
 The Call has already described how