New Mexico state record. (Santa Fe, N.M.) 1914-19??, 1916-10-06

and established The First State Bank.
lie was the president and chief stock
holder. There was jugglery OF money
between smiths bank and The First
State Bank of Tuclhlcdri. The Tu'
cumcari bank failed and in connection
herewith +. II. II. smith was indicted
by the grand jury at Tucumcari on a
charge OF embezzIement and con
sriraey 10 embczzIe.
In that Tucumcari failure and the
Indictment, Governor McDonald's
state banking department found out
what mapncr OF MAJ was +. Il. IL.
Smith. Not that the bank examiner
or the governor utilized this informa-
ton to safeguard the funds of the
STATE College and The people of Las
Cruces, but they had it. i is shown
in The public record.
They Knew the Smith Record.
According TO the testimony Of l.. b,
W0otVrs, assistant travelling auditor
md banF examiner, lie learned in Oc-
,obrr, 1873, that I. X. ii. Smith had
led when he wrote about the trans
action between the Las Cruces bank
an lht ! Eb'INhAl Jain. ~ p'.IN
the proof of Smiths DECEPTION in the
letter flies OF the Tucuincari bank
AFTER The failure. Here it is rom lie
public record, jpag" 304l:
Question Was that the first time
that you realized lhat Smith was try
ing 10 deceive the auditors Officer"
Answer Cby WootersJ. We'll, |
found those things cut when was
down there. J I'arncd that before !
saw those letters
@. "Whereabuuts?"
A. When | was examining the
First state Bank OF Las Cruces in Oc-
tober."
This Mas in October. 1919, it will
he remembered. Assistant Examiner
Wooters not only got the bunch then
that Smiths word was not TO be
trusted, but he found that the capital
of the las Cruces bank had been i'm
paired TO the extent of IS per cent.
Thus the bank was virtually insolvent.
The governor and bis travelling audi
tor did nothing.
@. You found out the balance was
not ~correct?"
4. yes, sir; he reported the wrong
balance"
q We'll. it was in connection with
This transaction then, was the first
time sou learned Smith vas trying to
deceive the travelling auditors office,
Or did you know it before?"
A.. THAT is the first concrete evil
dencc ! had of it,"
Q. THAT was enough"
A. Eyes, sir"
Enough evidence that Smith had de.
ociycd state officiaIei And this was
the mar they allowed to continue at
shady practices until he had sopped,
zip ali the money in the First State
Bank.
@. Now then, Immediately after,
Or in a short time after that, you be-
gan making certain investigations re-
5arding Mr.. smiths former career, did
you not?'
A, yes, sir"
@. What was the result of hat in.
y~estigation?"
A. We'll, | received various letters
in regard TO him. | was inquiring into
his financial worth, former connec-
tons"
Q. General moral standing, etc?"
A. Everything"
@. And from the letters YOU re.
ceived, What did you determine as to
his financial standing?"
A. Well, in my opinion | didn't
have Il very high regard for his finan-
cial condition after had received
those letters"
Q. And what opinion did you have
Of him as to his former banking con-
nections after receiving those let
ters?"
A. q figured it wasn't desirable"
An undesirable" banker. Unfor.
:unately people of Las Cruces-the
people of the ~state-didn't find that
out until December, 1914, when they
paid at harsh terms for the knowl-
edged. But the state bank examiner
knew it in October, 1913. So did
Governor Mcdonald.
1t is stated by Howell Ernest, Gov.
ernor McDonald's travelling auditor
and banker examiner, in the public
record, that his assistant conducted
those investigations which threw un.
desirable sidelights on the career of
Banker Smith at his, Ernest's, sug.
gestion. 1t is also stated by Ernest
hat Governor Mcdonald was as full.
ly informed as he about the condition
of the Las Cruces bank.
In addition to all the other informa.
lion which advised the Mcdonald ad.
ministration officials at that time as
10 7. r. H. Smiths unsavory reputa-
lion, Mr.. Ernest's office unearthed a
letter written in 1911 which gave
Banker Smith the following send-off
tpages 1927 and 1928, public record):
Treasury Department, Office of the
Comptroller of the Currency, Ell Paso,
Nay 80, 1911. c. v. Stafford, Terri.
torial Bank Examiner, Santa Fe, New
Mexico. Dear Sir:-The following is
Tor your information and is sent Won
1t the request of the state bank ex.
lminer of Texas. l quote part Of his