The San Francisco call., 1905-05-03
Generally Known in Bank
inc Circles That James B.
Smith Borrowed Money to
Make Good Eds Shortage
SECURED S165,0OO
FROM HIS FRIENDS
Put Up Stocks and Bonds as
Security and Much of the
Loan of a Year Ago Has
Since Been Returned by Him

There is mystery connected with
the defalcation and flight of E. j.
Smith, the late Tax Collector, which
the Grand Jury and the experts are not
able apparently to solve. According to
the gossip in banking circles and the
stories told on the street the large
amount of money which was put up in
April, 1904, to shield the Tax Collector
from exposure and arrest must have
been paid back to the parties who
loaned James B. Smith the securities
on which the coin was borrowed from
banks and individuals.
The fact can be proved that James
B. Smith did raise a sum approximat-
ing $165, 900, ostensibly for the purpose
of enabling the Tax Collector to make
a settlement with the Treasurer 1t
can be proved also that one we'll known
business man who put up securities to
the value Of 100000 to help the Smith
brothers in their pecuniary distress
was reimbursed: Shortly after the res
cue act was performed his stocks and
bonds were released and returned to
him. The story goes that John Rosen-
fields Sons accommodated James B.
Smith with loan of $65, 900, and there
is an impression that this amount is
still due them from Smith, although
they are fully protected by securities
pledged for the repayment of the
money.
Rumor to the effect that James B.
Smith is a director in the American
National Bank is not correct. The fact
seems to be that E. j. Smith deposited
large sums of money in that bank. He
deposited small sums in other banks.
The American National Bank and the
London and San Francisco Bank, it is
said, extended accommodations to
James B. Smith, taking as security the
gilt-edged bonds and stocks which the
Smiths borrowed from their friends in
business circles.
There is an, impression in banking
circles that the amount of money
which the Tax Collector squandered on
women of the half-world and slow
horses is oyerestimated. The defaulter
had some method In Juggling with the
public funds. In one of the city banks
he deposited the sum of $4,000. Checks
were occasionally drawn on the bank
and other deposits were made Finally
all the money to the credit of the Tax
Collector was checked out and no fur
ther deposit was made. The banker
calls to mind that nothing was ever
said to Smith, in words or figures, con-
cerning the trivial matter of interest.
The question is asked: Where did
the money come from which enabled
James B. Smith to repay the parties
who advanced him 100000 one year
ago?" There is a very strong suspicion
among politicians that the coin, aif it
ever reached the Treasurer's office, was
taken out again as soon as the danger
of exposure passed. There is hardly a
doubt that the Tax Collector had con-
federates at the City Hall who kept
him advised as to the probable inten-
tions of the Mayor and Grand Jury
In due time the Grand Jury may be
able to obtain from well-informed
bankers all the details connected with
the alarming rush one year ago which
ended in the raising of $166,000 to
bridge over the delinquencies of the
Tax Collector. The bankers may not
care to talk for publication, but they
might be constrained through a spirit
of civic patriotism to impart informa-
ton in confidence to the Grand Jury.
The banks cannot lose anything, as
they hold securities of gilt-edge char
| acter for money advanced. The city,
| it Is said, will not lose, as the surety
company has announced a purpose to
make good it's bond The story of the
| defalcation as told in April, 1904 to the
Rosenfelds would surely prove interest
| ing Enterprising merchants who knew
1 one year ago what the Grand Jury is
now trying to find out may be per-
suaded to divulge.