Carrizozo outlook. [volume] (Carrizozo, N.M.) 1910-1945, 1916-10-13

THE First State Bank Of Las
Cruces failed December 8, 1914,
with a crash felt all through the state.
rhe bank had been looted by the pres
ident. 7. n. II. Smith, and his crea-
lures, Of something In excess OF $l4b,-
900.
The failure left a trail Of misery
and Indignation In the Messila valley
and Il all but broke" the New Mexico
State College OF Agriculture and Me-
chanlc Arts, funds OF which were de-
posted there.
Governor w. c. Mcdonald and his
appolntee, Howell Ernest, state travel
ing auditor and bank examiner, had
known for months that the bank was
iLsolvent. They had known that T..
X. IL. Smith, his family ard friends
were appropriating the banks money
a-d giving worthless notes as So
curlty.
The governor and his banking de.
partment sat by permitting the dear
ly got savings OF struggling house
holders, farmers, widows and child
rcn to be conflscated month after
II Onth until there was nothing left to
uD anu llt lllNNHAy
H. came TO an end.
Governor Mcdonald did not SO
II uch as lift a finger TO save Tie near
ly GOO innocent depositors Of the First
S ate Bank from exploitation and ruin.
a though he knew nearly year be-
fore the crash that the bank was
busted, the governor did not take a
ugle step to protect the funds OF the
ate Agricultural College, OF which
public institution he, by virtue OF be.
ing chief executive, was ex-officio q
regent and the head.
From Governor Mcdonald and his
81 bordinate, the state bank examiner,
20 whom they had the rllht TO look
for protection against hank looters.
u Q 600 men, women and children who
" re deposltors OF the First State
Bank got nothing but Ciuel neglect
IA d Indifference. Many o. them were
J. or ranchers and wage-earners.
\ nety-four OF them were women. ANY
number were wiped out" by the bank
failure; all the money they had In the
world was gone.
Nor did Governor IICOo- aid give
any more consideration TO the fate OF
belonging to the young people of the
state Of New Mexico Tor their educa-
ton in agriculture and The practical
arts, went with the rest into the
clutches OF the Smith family. The
governor did not Interfere, nor did his
nppointees, the bank examiner.
Nothing was done by Governor Nc
D-nald except that. perhaps IN crate
ful remembrance OF the First State
Etnks contribution 10 his party's cam.
raign fund In 1911. he permitted r.
Il H. Smith TO continue his ruthless
b NIX wreoklng, The First State
L INK OF Las Cruces financed tho
= mocratic Pro-McDonald campaign
w. Dona Ana county IN 1911 later pay
IL < itself back-wlth Interest from the
State College funds.
In October, 1918, the carital OF the
First state Bank was lmpalred TO the
extent OF So per cat. The instltu
tion was virtually inrolvent on tor
OF that, It's president had deceived the
state banking department and had
been indicted on an embezzlement
charge. Bank Examiner Ernest knew
this. Governor Mcdonald knew II. too
Ernest said he kept the governor full
ly informed about the bank. II Is SC
sisted clearly In the sworn public
record.
BY January. 1914. the impairment Of
the banks capital had mounted TO l5(
per cent. Banh Examiner Ernest
stated that a bank 30 impaired was In
solvent