The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1899-02-05

The customary post-mortem eXplana-
lions, regrets, imprecations and abuse
that follow the death of a banking in
stitution are now being heard in refer
ence TO the collapse Of the Union Saw
ings Bank of San Jose. The Bank Com
missioners have finished their work,
which, as usual, was nothing more than
that done by the official undertaken.
Bankers and financiers are telling each
other what might have been if the in
stitution had not failed and the man
ayers had exercised the judgment Of
business men instead of the spirit Of
gamblers. The depositors are survey
ing the wreck with what calmness they
may command and are nursing the loss
of their savings as philosophically as
may be.
The collapse of the Union Savings
Bank fortunately has not involved any
other institution. The law will now
take its course and another anomaly
will present itself. The Bank Commits
=. sion is supposed to be a protection to
depositors and creditors Of banks, to
save the public from reckless or I'M
scrupulous flnanciers and to prevent Ill
advised speculations with the money OF
the public. The commissioners are eX-
pected, under the fiction Of the law,
TO keep a watchful eye on all the banks
of the State and to set an emphatic
veto upon any course Of action that
may be detrimental. AS a matter of
fact this is just what the Bank Com
missioners do not accomplish.
The commissioners may warn as
much as they please, but if anything
more serious than warning is at
tempted the very thing the commission
ers seek to accomplish will be destroy
ed. If by any act the commissioners
call attention to q bank, whose condl-
ton is not sound, the credit of the sus-
pected institution will be at once i'm
paired and the commissioners will have
done what they sought to avoid.
The Union Savings Bank OF San Jose
affords an admirable illustration of
this fact. In 1897 the Bank Commits
sioners warned the directors OF the
Union Bank that they were permitting
z. B. Howard to have too large an
OVerdraft. Towards overdraft at tha'
time was only trif1e more than $4,000
The directors paid no attention to the
warning, and Towards overdraft in
creased rapidly to enormous proper
tons In November last the amount
was $141, 900, and again the directors
were sharply reprimanded- h. Ward
Wright, who was president Of the bank
was given a severe lecture and was or
dered to report to the commissioners
within thirty days. That report should
have been submitted not later than De-
cember q last, but Wright ignored the
Injunction of the commissioners and his
own promise.
The commissioners claim that they
did not dare take public action, as they
would have provoked a panic and a
run on the bank. The result was that
the institution under Wright's presi-
dency continued on it's wild course. Or
December the commissioners ISSUED
a sharp order to the bank authorities
to reduce the enormous overdrafts en-
joyed by five customers. Instead OF
Obeying the orders of the commission
ers the directors of the bank permitted
their faVoriteS to make further over
drafts to the amount Of 100000. In the
language of financiers this action or
the part of the directors is character
ized as poor judgment" The deludeG
depositors, whose money was being dis.
6ipated in overdrafts to gamblers, have
a more expressive and emphatic term
with which to describe the incident
The disclosures made in the report
of the Bank Commissioners show that
Howard and other gamblers in fruit
were not the only spectators that had
the favor and the financial backing OF