The San Francisco call., 1908-04-23
BANK WRFCKERS
GIVEN FREE HAND
Official interference Prevented
by Members of Former
State Board

bank commissioners while Zoeth S.
Eldredge, president Of the National
Bank of the Pacific, was a member of
the commission, was one of the con-
tributory causes of the crash of the
California safe deposit and trust COM
pany last October. Assertions to that
effect were made yesterday morning by
Eldredge to the state legislative COM
mittee appointed to inquire into bank
ing methods at meeting of that body
in the Offices of the harbor commits
sioners.
AS early as March, 1905, at an in
formal meeting of the bank commits
sioners held in Los Angeles, 1 called
the attention of the commissioners to
the fact that the banks of San Fran
cisco We're looking askance at the
California safe deposit and trust COM
pany. I then recommended that a
warning be given the officials of the
bank in question. I did not counte-
nance anything further, in view of the
fact that Western Pacific company bonds
were about to be issued, on which the
bank would realize $500, 900. My ad-
vice to the commissioners was that as
soon as the bank had realized this sum
the screws be put on them." Mean
ing the officials.)
Asked whether or not the screws
piled in the negative, explaining that
the commissioners refused to follow
his plans
In the last week of July, 1905, and
the first week of August 1 made a
thorough investigation of the bank"
continued Eldredge. I'm my report to
the commissioners I criticised severely
the methods of the management Of the
institution and the character of the
loans made. Subsequently 1 made an
order directing the manager of the
nate certain other features of the
banks business
Shortly after the investigation and
the subsequent letter to the bank Of
nclals, Eldredge said, he resigned from
the board of bank commissioners to
take up the presidency of the National
Bank of the Pacific, the organization Of
which he had just completed. The res
1gnation was forwarded to Governor
Pardee in June. but at the request of
the latter Eldredge remained in office
until after the investigation of the Cal
ifornia safe deposit and trust company
was completed.
Had 1t not been for the friction be-
tween myself and the other members
OF the commission / would have seen
that my orders to the bank were car
ried out, but was unable to proceed !"
Eldredge said Il proposed to enter the
pank and close up everything SO that
not one single change of any kind
could be made until 1 had completed
my examination To this the members
OF the commission would not agree.
Had such course been followed at
that time the depositors undoubtedly
would have been saved millions"
Asked for an opinion as TO the laws
governing bank commissioners. Ell
dredge replied that such disasters as
occurred last October could never be
stopped until completes authority were
vested In only one bank commissioner.
the remaining commissioners being
subject to the formers orders.
h. J. LIE Breton, receiver for the CAL
ifornia safe deposit and trust company.
VINO was before the legislative commit
tee yesterday. denounced the present
pank commission as a farce, declaring
the entire system to be wrong. LIE
Breton did not believe that such power
should be vested in one man of the com
mission as had been suggested by Ell
dredge. LIE Breton said it was his
opinion that banks should be divided
into commercial, trust and savings
banks and that each should confine it.
self to business along a single line. He
believed 1t would be for the good of the
country If there were fewer banks and
tnat laws should be constructed so that
there would be less profit for savings
banks.
lie Breton called attention to a dis
covery he had made as receiver, saving
that the officials of the bank had IA
vored one of the bank commissioners
presumably to advance some of the
banks schemes.