The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1899-02-04

Jose VIII not reopen It's doors. Inc
institution has been hopelessly
L wrecked, and Attorney General
Tirey L. Ford at the instance OF
the Bank Commissioners Will at once
institute legal proceedings to have the
bank declared insolvent. The concern
will then go into liquidation, ana
assessments will be levied on the stock
holders to pay the depositors. The Bank
Commissioners have finished their IN
vestigation and the record Justlfles the
accusation that the defunct institution
was managed by gamblers and not by
bankers.
Spectators and not investors were
given financial aid and hundreds or
thousands of dollars were loaned with
out proper security to plungers in their
wild schemes. In one instance the sum
of over $140, 900 was given to single
speculator in fruit, and not as much as
a scrap of paper was taken IN ex-
change. Not satisfied ith this vicious
policy. the directors of the Union Bank
loaned the same man $S0,000 more. Five
favored patrons of the bank were al
lowed to overdraw to the enormous
sum of 1929, 900. One of the directors OF
the institution was allowed the privi-
lege of overdrawing his account $l2,OOU.
The spirit of speculation and gam
bling ran riot in the institution ana the
inevitable crash followed. For many
months the bank was tottering and
then it fell. The commercial and saw
f.,sys ercIannts OF the .bsnk were in
vowed one with the other. Cash re-
serves in neither department were
maintained at the proper point or
safety. A little clique of favored
speculators had full sway and sapped
the bank at its foundation. The rec
ords of the Nqnk fail to disclose any
nalpable frauds The books under
casual examination appear to nave
been honestly kept. Among the worth
less securities of the institution there
are few purely accommodation notes
AS far as the Bank Commissioners
have investigated, there is nothing
upon which r charge the managers
with a more serious offense than bad
Indictment" The character Of that
Judgment may be clearly seen, how
ever. in some of the results Of the lnves-
tigation by the Commissioners. In the
wreck of the Union Bank one great
overshadowing sinister figure appears.
It is that of E. B. Howard, plunger and
gambler in fruit, who received from the
hank managers an enormous fortune
without giving a scrap of paper in Sc
curity.
The Bank Commissioners discovered
in their investigation of the banks al
fairs a most startling series of facts.
The commissioners reduced the avail
able assets of the bank the enormous
sum of S491, All 81, cutting down the IN
fated estimates of the bank authorities
from the sum of 81, 7,479 81 to $7OO,-
06S %. Bills receivable that the bank
officers estimated at $302,SS5 4S the COM
missioners value at S146.182 49, Over
drafts that the managers of the
wrecked concern estimated at $311,-
302 OF the commissioners declare are
not worth more than $126,540 62. In a
general summary the commissioners
find that the available assets of the
bank are $13S,215 35 less than the liza
bilities. This is a showing more shame
full than was that of the Pacific Bank
when the first expose Of the affairs of
that institution was made.
Notwithstanding these outrageous
facts, nothing more than an accusa-
ton of "bad judgment" may be made.
This condition of affairs has existed
for many months, during which the
Bank Commissioners reported that the
institution was financially sound.
Gamblers and reckless spectators
were given the protection of the law to
plunder merchants and depositors. On
November q last the Bank Commits
sioners examined the Union Bank and
were thoroughly informed of the facts
that are now made public. The com
mission refused, however, to close the
bank and over two months more were
given to the manipulations of the
plungers. In this connection it should
not be forgotten that A. w. Barrett and
& D. Murphy were not on the commits
sion which was then composed of n.
w Magee, John Markley and Paris
Kilburn. AS 1t requires a unanimous
vote of the commission to close a bank.
John Markley was powerless to act in
the face of the adverse decision of his
associates.
The significant story of the wreck of
the Union Savings Bank of San Jose
begins with the examination made bv
the Bank Commissioners on November
q last. AS already indicated, the COM
nissioners as a body did not then con-
slider the bank insolvent and conse-
quently refused to close it. The out
rageous banking methods of the man
ayers were palpable facts, however.
and on December the commissioners
sent the following important letter:
December 8, 1898.
To the officers and Directors of the
Union Savings Bank, San Jose, Cal.-Gen-
tlemen: The examination recently made