The Goldfield news. [volume] (Goldfield, Nev.) 1904-1911, 1910-04-09

ITb;, was a Smith bank. The bank did not W. inc A"" ,l,1um
70 nav depositors nor did the Smiths There were o'ner ;" o~o - .ho
=, Reno and the board made these stockholders furnish %-V'" AZ
hank. The Manhattan bank was then forced into hqmua"V"
liar for dollar was paid every depositor. un Tho
The Eureka County bank presented a most difficult p rV''"
board found that the deposits were large, saving oepps"s sass
amounting to over 100000, and the aggregate deposits ANU 49,,
600 When the board took office the amazing fact was dscUS'U '"
the Smith brothers, Mrs. Minnie Smith, and W. L" GIlmln' 20"
Smiths fatherinlaw, had borrowed for themselves ana n various
companies in which they were the principle owners M enoi U
mm OF $277Js7.45 or about rs per cent OF the total deposits. VI '
amount $~477s3.9O stood as overdrafts, and the balance Sa :; s were
by stock of live stock and mining companies III wmcn TN o"'n' "
largely interested. f0r,bw;tb9
As the result of such a course the depostors would have lost practical ca.
Iy every cent. The failure would have been a complete smash Inc
Smiths were called before the board and instructed as to what they
must do or suffer the bank to be closed. The demand was upon
them that all the securities in the livestock company they owned
and it amounted to a very large sum-should be endorsed over 10 ne
bank. The same demand was made Is to other stocks, real estate, etc,
in fact the Smiths were to turn over to the bank everything they pos
sessed for the protection of depositors. To negotiate these transac'
|tions required time, the calling of stockholders meetings, etc, etc.
With the understanding and promise that these demands would be
to time the Smiths were called before the board and always reported
progress. In fact they had a deal under way at one time that "a u
realize large amount of money but time to consummate 1t was neces
In the meantime the Smith lease on the Pioneer at the camp of
that name making good money and gave promise OF large returns
from which, it was arranged, the Eureka County bank would profit
Then the cattle selling season was coming on, when the big loan to the
Eureka cattle company was to be %Equidated. The Smith brothers
owned very large herds of sheep and the wool crop was also to go
to reduce their Indebtedness to the bank Altogether, the prospects
were good for a very large reduction of the Smith brothers Obligations
to the Eureka bank, if only sufficient time were given. The board
kept in close touch with all these affairs and assisted the omtns
wherever possible. The Smiths surrendered to Eureka County bank
POS shares of stock Of that institution and in time, paid III a large
amount from the sale of stock, as had been arranged. The Pioneer
lease. however, got into legal tangles, its dividend, which had been
declared, was enjoined and the Smiths have to this time received
nothing from their interests therein.
Before other deals were consummated which the board had in
hand, the national bank examiner closed the Smith S First National
bank at Rhyolte. This threatened a u on their Eureka bank, and
the banking board decided to close that institution at once.
Judge Peter Breen, in a grandstand play at Eureka, in receiver
ship proceedings. censured the banking board for not having acted
sooner. saying depositors should have been warned so that they would
have not made their deposits in the bank. This statement was entire
Iy gratuitous and without knowledge of the facts. The bank examiner
had testified that months before he had made a statement to the board
showing it's insolvency, but he was not permitted to explain why te
board had delayed in closing the bank, and Judge Breen took this
partial statement a a pretext for lecturing the banking board. he
suits will disclose that the action of the banking board was not only
warranted but wise, for depoItors will now receive perhaps 60 to 70
per cen of their deposits, if the receiver does his duty, whereas II
the bank had been closed months before, they would not have re-
ceived 25 per cent of the amount. Judge Breen, i'll making has talk
when the people were aroused and excited. was only playing to the
gallery, and in time he will realize the injustice he has done the board.
Every thought and act of the banking board was III the interest
of depostors, and the records of the meetings OF the state banking
board will disclose the fact that the board dd everything in its power
to recover the money of depositors before forcing the bank into lqui-
dation. AS fol the Smiths, instead of protecting them, the board had
fully decided upon prosecuting them to the limit of the law.
The statement of the banking house of John S. Cook & Co. as
made to the state banking board under date of April ), shows that in
stitution to be in such excellent condition as to be matter of grahfca-
ton to it's customers and to the people of Goldfeld.
The Cook bank, under this statement, shows deposits of 81, 543,o1O,
with cash in bank and due from repositories, of $33I,640 or about
33 per cent. When it is understood that the state banking law only
requires a reserve of Is per cent, it will be realized what good and
conservative banking is being done by this institution.