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

the First State Bank Of Las Cruces,
and it has been affirmed by the Su.
preme court. 1t is doubtful II one
penny can be. realized ON this judg.
ment now. Had Governor Mcdonald
and his travelling auditor, Ernest.
stopped the footing Of the Las Cruces
bank, the Judgment could have been
collected and the people Of Quay coun.
ty would have received the money az
dividends from the defunct Tucumcari
bank.
The people of Quay county, there
fore, are sufferers with the people OF
the Aessila valley from executive ne.
elect and dereliction of duty. More
victims of political banking"
McCarty's Report n Warning.
Special Deputy Travelling Auditor
and Bank Examiner McCarty sub
mitted his report on the Las Cruces
bank to Howell Ernest on January II,
1914. He reported excessive loans,
uncollectible and doubtful notes." In
one place the McCarty report stated:
Il would suggest to Mr.. T. II. H.
Smith, the president of this bank, that
he confine his loans to the commun-
ity in which he is doing business;
that he not grant such large lines OF
credit to people to whom he is in
debted for some of his larger de-
posits. l SHOULD CRITICIZE ST.
VERELY HIS LOANS TO HIMSELF,
FAMILY AND IMMEDIATE RELA.
TlVES AND SHOULD INSIST THAT
THEY BE TAKEN OUT OF THE
BANK OR RhDUCED CONSIDER
ABLY AT ANY RATE. find thai
his mother, Mrs. l.. b. Smith. owes
$4,150; his brother, ~$G,020.60, and his
own notes amount to $4,000"
The Smith Family Rbbbersome."
McCarty found 40 per cent of the
banks capital in overdrafts. Here
was Mccarthy recommendation:
considering the above | would
OF the board OF directors and
levy an assessment OF 10 per
cent IN the banks stock. | AM
SURE THERE ARE OTHER
LOSSES IN THE LOANS WHICH
WILL SHOW UP WHEN These
LOANS ARE EXAMINED IN CON
NECTION WITH THE BOARD OF
DIRECTORS"
The Social JIunt to Las Cruces.
Goaded into some semblance OF con-
Germ in the threatening situation at
Last Cruces by the lawyers letter and
the McCarty report, Governor Melon.
aid and his bank examiner, Howell Err
nest, made a trip 10 Las Cruces The
lntt,r r,,.t og Ian11.ru 1n1i M, l'r-
nest tells of that expedition (begin-
ming on page 800 OF the public rec
ord:
Question Nov then, you did so to
Las Cruces in January, 1912"
Answer (by Mr.. Ernest Yes, sir;
January Goth"
@. What was your purpose in 60
ing there?"
A. Il went there for the purpose
of ascertainirg, il possible, the condi-
tion of the bank, the condition of the
paper as shown by the combined re-
ports of the two examinations. the ex-
aninations by Mr.. Wooters and Mr..
McCarty."
Mr., Ernest and his assistant,
Wooters, had estimated that The com-
pared reports of examinations into
the Las Cruces bank by Wooters and
McCarty showed that the impairment
of the capital stock had increased to
150 per cent in January. 1914.
Q. THE governor Went with you?"
A.. Eyes, sir; he was there"
z. Did the governor often 20 with
you in investigating banks?"
A. NO, sir"
q. is that the only time he ever
did?"
A. THAT is the only time / have
been with the governor in connection
with any banking meeting"
@. What about this bank at that
time, was of such a nature as to re-
qui.o the presence of the governor
there?"
A. Why, l don't know. He was
going down at that time, l under
stand"
Thus it may be that the iInputation
that Governor Mcdonald was goaded
into having a look at the Las Cruces
bank does him an injustice. Perhaps
he merely happened to be going that
way and did not make a special trip
to bother himself with the status of "A
shaky bank, the depository Of State
College funds, and with 600 innocent
patrons.
Mr.. Ernest's Thrilling Tale.
To resume Mr.. Ernest's thrilling mar
rative about how he and Governor
Mcdonald went to Las Cruces to in
vestigate and then went away again:
Question did you know that | had
written the governor and had sent
him a copy OF McCarty's report?"
asked Reed Holloman.
Answer mo, | didn't know that you
had sent him a copy of McCarty's re-
port. He had seen the copy that Nc.
Carly scot me, although he said he
had received a letter from you. He
told ne that"
The governor had TWO copies of
McCarty's report, telling about the
$50 per cent impairment of the First
State Bank, the queer notes and all
that.
@. Did he express his opinion at
that time as to what he thought rela-
tive to the condition of the bank or
that something ought to be done?"
A. Not particularly; no, sir"
Governor Mcdonald was certainly
standing by that political bank" o
to say that something ought to
be done" about a bank that had con-
to his party's campaign
then paid itself back with
interest from the states school money.
@. What did you do"
A. Il got down there in the morn
ing, went to the hotel and got my
breakfast and went over to the bank.
presume / got over to the bank
about half past nine or q quarter OF