Los Angeles herald., 1907-12-09

absolute confidence in all of their var
ious securities. The trouble with their
bank, however, is that the securities
of which they think so much have not
enough cash convertibility to help them
out of their present embarrassment"
The depositors of the bank are. for
the most part, professional men and
laboring people.
The bank was depository of the
Western Pacific, which, it is said, had
balance in the bank of S250,0O0 when
it closed. An Ogden institution is said
to be creditor for s250,000.
Vast industrial enterprises were
launched in the form of the Carnegie
Brick and Pottery company, the Edo
rado Lumber company and the Pacific
window Glass company. Enormous
sums were expended in these enter
prises and to sustain them it became
necessary to advance them large sums
of money.
Drain Too Much
The drain became heavier than the
bank could stand. Then came gem
eral slump in stacks throughout the
country and with it a steady run of
depositors. The bank was not MEM
Der of the clearing house, and found
itself in a perilous position when the
panic seized New York. The reserve
was depleted. The clearing house was
not disposed to assist the bank, and it
was forced to close it's doors.
A desperate effort was made to save
the bank from receivership, and to
that end the directors proposed to raise
5000, 600 by an assessment and the sale
of stock. and an additional 100000 was
to be supplied by the directors indi-
vidually Some of the directors have
already placed their property in escrow
in the Metropolitan Securities company.
holding corporation, but on the ad-
vice of his attorneys President Walker
declined to be a party to the plan.
Walker has stated that he was shocked
to discover the condition of the insti-
tuition.
The report of the bank commission
on the concern showed the banks in
debtedness was nearly $9,000,000 and
that the bank had reserve of only
100000, where the law requires S1.S00.-
600. The negotiable assets of the bank
are placed at $4,000, 600.
1t is charged by the commission that
the bank flagrantly violated the state
banking laws. one violation specified
being the acceptance of money when
the bank was known to be insolvent.
Leaves Railroad
Mr.. Bartnett today telegraphed his res
| resignation to President jeffrey of the
Western Pacific railroad, and of his own
volition withdrew from the offices Of
vice president and general attorney of the
railroad.
''I shall also resign as special admins
traitor of the Cotton estate" Bartnett
said, mot that am guilty of the charges
which have been made against me, but
because there Is a conflict between the
interests of the estate and the California
Safe Deposit and Trust company and un-
der the circumstances cannot be placed
in dual position. For these reasons
am going to resign, but not because am
guilty of wrong doing.
"As to the Cotton securities, all will
say is that have not sold nor hypothe-
Gated them. am innocent of any wrong.
THE bank has $1,500000 on call, and
81, 900 in notes-some of them slow,
but most of them collectible-and 1t has
$500,000 cash. In thirty days, if the stock
holders will help us, we will have $2,OO0,-
900 in cash.
1T would be ruinous to have a receiver
appointed at this time. 1t would be
against the interests of the depositors.
If receiver was appointed today and
dumped these valuable securities on the
market it would mean disaster
That a joint suit to recover approxi-
mately $9000,0OO will be begun at once by
the protective association of the deposit
ors of the bank was announced today by
Attorney Charles e. Boynton, represent
ing depositors who number about 1900.
The suit will be directed against the 350-
odd officials and stockholders of the sus-
pended institution.