The San Francisco call., 1899-02-09
WRIGHT THRIVED
ON THE COIN OF
SMALL INVESTORS
The Loan association Was but q
L" Feeder" for tbe UnioD
Savings Bank.


ness to the bank is variously estimated
at from $500 to $500, ,000-enough to
wreck any bank possessing the re-
sources of the Wright concern. But
while the inroads made on the banks
funds by Howard undoubtedly were
the. direct cause of the failure, they
only hastened the inevitable end of an
institution which from the start has
been conducted on false pretenses.
It now appears that the Building and
Loan Association of San Jose, which
was organized by H. Ward Wright in
1885, and was always controlled by
himself and members of his family, has
been used primarily as feeder for the
bank. The Wrights have been feeding
from both ends of the trough, until
the building association itself, repre-
senting the savings of thousands of
people in moderate circumstances, was
seriously menaced, and it may prove
fortunate circumstance for the share
holders in the loan association that
the failure of the Union Savings Bank
was not delayed for another year. The
facts in the case are vouched for by
men of standing, who have had every
opportunity to become familiar with
the subject, some of whom formerly
held shares in the loan association, but
drew out when they saw how it was
being manipulated by the Wrights as
an adjunct to the banking institution
which is now awaiting liquidation at
the hands of a receiver. The story is
best todd in the language of leading
attorney of this city, who knows
whereof he speaks. He says:
THE San Jose Building and Loan
Association was organized In 1855 by
Ward Wright and a few associates.
The association prospered from the
start, and four years later Wright or
De- IL Il
a capital of $200,000, Of which $4,000
was fully paid up. The banking busi
ness under Wright's management also
prospered apparently, but this pros
perity was in large measure assumed,
for 1t is known that for years the funds
of the building and loan association
were used TO carry the bank. III.
Ward Wright, as secretary, and W. I'll.
Wright as treasurer, Of the asso-
citation, controlled its funds which
were deposited in the Union Savings
Bank. of which w. H. Wright was
manager Frank Wright put In an ap-
pearance in 1892 and was elected sec
retary of the association, succeeding his
brother. Ward 1t was too good
plum TO be allowed to go outside the
family as the salary wus and is $3.50
a month, and, of course, it would not
do to have the management placed in
the hands of a man who might want
to transfer the funds to some other
institution.
LAS an illustration Of how the funds
of the association were tied up in the
days of its greatest prosperity, mem
bers applying TO the secretary for loans
on their shares were Informed, in a
large number of instances, that there
were no funds available, but that the
bank would accept their shares in the
building and loan association as Sc
curity and advance the money they
were entitled to from the association.
Further, when the association was or
ganized the members were Informed
that the first series of shares would
mature in seven years. When the
time expired there was no money to
Iiouidate the claims of the members,
and instead Of getting their money in
seven years. they were compelled to
wait ten years. In fact, they were not
paid until about a year ago, and even
then, instead of getting cash. the mem
bers were In most instances given
pron1issory notes.
"Of late years the bank has not been
handling so much money belonging TO
the association. for the simple reason