The San Francisco Call. Newspaper, November 2, 1898, Page 1

JOLUME LXXXIV. SAN FRANCISCO, Cipher Dispatches That Prove the Robbery of the The Savings People’s Bank. Institution Was Bled to Save the Pa- cific. When Disaster Threatened Frank Was Ordered| to Handle the Savings Bank or Hang Himself. Bank and the Peor he Call published yester- has created widespread r the first time since the the public has learned of the gigantic con- destroyed the institutions. the 13,000 depositors in the Bank i nowing that the wreckers der the money Of the peo- k of judgment, but de- e it It is this proof that may Tecover property and that 1y be punished for their he establishment. of this ord of the guilt .of R. H. naturally comes first: e crime of this man is established in his own, handwriting, in - cipher- dls- itches that were written Jong. after banks were ruined, but before they ad closed their doors. In the startling correspondence of the wreckers of the Facific Bank thé let- Richard B. McDonald Jr. have, with very few exceptions, little import- in then Dick’s letters are reflected f: re thoroughly in the re- markable ers he received from his ther and the parasites 1ded the McDonald family. n In oof the r Donald th h k McDonald, D. 8. Dorn, W. H: Eastland, D. M. » M. Mitchell and others : continent and invad- and’ Paris-in-a wild , the letters of Dick betfer in the answers he received. = It was only Wwhen the banks were actually .crumbling,” when disaster v nevitable, that..Richard H. McDona entered the‘corre: spondence as a criminal.. In cipher dis patches written shortly before:..the banks went down Dick McDonald' ex- pressed his desperation, his terror and his torment nind and begged brother F' k not to neglect him in the 1eed, but to give him one last opportunity to be a thief. Richard H. McDonald Jr: is perhaps. the strangest figure: in the- strange coterfe that ruiried the two' big i-San Francisco banking institutions. had the wildest dreams of . urnatural finance—the most peculiar notions :.of banking success ‘floated " through' i brain. ' He was : absurdly’ ambitious and saw himself elevated on’a pinnacle of financial greatnéss second.to none‘in the count His personal egotism was monumental. Through the Pacific Bank, and with the assistance of crafty flatterers, he believed that he.'was: to becomé the greatest man in California; if not one of the grea ‘in the Unfted States. - ‘He established a Californiai Illustrated Magazine and ‘organized g San Francisco. Printing Company in or- der that he might adyertise himself. That 3ank $60,000. i d-Jr. He’'employéd D: Dorn vitally | ther had fled ffom this | his| e | | &g his attorney and permitted Dorn to enter into almost every crazy scheme of | the bank because Dorn promised to | make himi Governor ‘of ' the State of | | California. In 1892 the attorney had some polit- ical influence and suggested to Dick that in that campaign they capture the Sehool Board of this city and use.it as a lever to gain the influence of every school teacher and ‘through . them ‘a power. that certainly would be felt in the gubernatorial campaign of 1894. Dorn went so far in his scheme as to secure the nomination of A. F. Johns | and James A. Pariser, who was then at the head of the San Francisco Printing Company, another expensive luxury of | Dick McDonald ‘that. the depositors | paid for. These candidates and others, fortunately for the community, were defeated. - Dick .McDonald then had other schemes of political and financial ambitian. He bought the Panorama, at Eddy.and Jones streets, to illustrate himself.- - He purchased stereopticons at great cost, and under a mask of | sanctity loaned them to ministers and congregations in order that his ple- ture might be projected on the screens to admiring throngs as the coming man of affairs.in California. ' He hired Pro- fessor Holder, ostensibly asan editor, and then used him to make an. over: draft.‘of '$135,000, and to act as d go- between for him . with’ politicians. {-of this'cost money. -The schemers: that. | #ere. flattering Dick “McDonald: weré not; doing* 5o for :their health. -Banks received, -overdrafts,. worthless enter- | prises were. organized and fostered. A | golden ‘stredani flowed from.the People’s | Bank into-the Pacific Bank and -out of, |'it into the wild corporations that Dick’s. j'nauerers ‘encouraged. - * Eich | ~M. H. Sherman - posed as a * political {.bower i Lés Angeles, but hé wainted to |:butld’ the Los Angeles Electric Rail- road." Heé had- Phoenix watér bénds-to sell‘or to negotiate and a Phoenix rail- ¥, that .began: nowhere and .ended nowhere,to. be supported by the Pacific: |'Bank; -There was a Riverside bank, a | John Brown ‘colony, and’ wherever there | veré ‘schemers Dick McDonald thought there . awere . votes.-In’ this way and thfough ‘these agéncies. the two .'San | Fraricisco:-banks: wére wrecked. The facts are fllustrated better'in the an- [swers that Dick réceived to his letiers { rather-than his ietters themselves 5 'DICK JUGGLES WITH TWENTY. $1000 BONDS, - © - | - As already:indicated, Howevér, there are some: -of -Dick’ McDonald’s letters | that dre: of "extremie iriterest and im-- portance,-. .One ‘of these wds written on April 13, 1893, to the.California Safe De-- ‘posit.“and:. Trust - "Company. In this | epistle ‘Diek: -.McDorald; absolutely without . conscierice; deliberately lies to éover & transaction” that -he hoped would be worth: several thousand dol- dvertisément. ‘cost .the’ -Pacific |lars to his bank. The Pacific Bank had in. its possession at.that ‘time twenty All |- 'R H. McDONALD JR. IS A PRINCELY THIEF WED! Call NESDAY, NOVEMBER 2, 1898. - PRICE FIVE CENTS. BY THE AUTHORITY OF HIS OWN SIGNATURE ‘When R. H. McDonald Jr. realized:that cipher dispatches to his brotl cipher, the above telegram.reads as me if arrested. Should Chemical not accept Pa’s indorsement make S. and D. also, Keep cool. B D T'ROBBER the Pacific ‘Bank” and-ifs’ feedér must soon close their déofs he sent a_series ‘of column by follows: “If you her Frank. These dispatches are of the most criminating character. self of theft in his own handwriting. The cipher must be read from left to right. The left hand column of words was’ sent by the Postal Telegraph Company. and the right the Western Union Company. fall with Chemical, telegraph, as I wish to save a little to defend Dick convicts him- Translated -out of bonds of the Blue Lakes Water Com- pany, each bond having.a face value of $1000. - The company desired to call in thése bonds and by canceling them re- | lease the mortgage for’ which they se- cured the payment. It was. the pur- pose of the company to place another mortgage, but to make it a first mort- gage. This ceuld not be done uitil the ‘first issue, of bonds had been canceled. If any had- been left outstanding they would have constituted a claim agalinst the'company.’ ~ Dick: McDonald wanted to keep'the first bonds,” and through a lying letter obtained twenty” more, thus ‘making $20,000. He declared in his let- ter that the -bonds had been mislaid, but on the very. next day the Pacific -Bank delivered these very bonds to M. .Jagper McDorald, the uncle of R. H. McDonald Jr. It wag rierhaps very fo: pany that they would not accept Dick McDonald’s lying letter. - The twenty bonds ‘that M. Jasper McDonald re- céived were buined by the trust com- ‘pany. on the very day that' M. Jasper McDonald recelved them. Dick. Mc- | Donald's letter to the trust company is as follows: . S8AN FRANCISCO, Cal., : ~ April 18, 1898.- The California Safe De- posit and Trust Co., City— Gentlemen:. We 'beg to in- form you thst we -have in, /%-WT (i 9 “THE PEOPLE'S OUR 0 suT uthin Gring wpy NLY RESOURCE NOW.” ey ‘fi : utl R. H, McDonald Jr. sent a frantic dispatch to his brother to return immediately from New York and handle the People's Bank, to save the Pacific. Dick feared that in the closing days of the institutions D. 8. 'Dorn and J. E. Farm wers plotting against him. This telegram of distress, in his own handwriting, is glven above, 2 s turiate for the Blue Lakes Watér Comi- |. EEETe our possession, but which unfortunately have been mislaid, twenty bonds of Blue Lakes Water Compa- ny, numbers 842 to 861, consecutively and inclu~ sive, each for the sum of $1000, .dated 8lst of De- cember, 1891. As we are unable to de- liver thesé bonds at pres- ‘ent we hereby agree and promise to deliver same to you as soon as they are found. B We hereby further con- .sent and request that you release the mortgage by which the payment of said bonds. is éecured, and in doing this we hereby agree to hold you harmless and indemnify you against all .cost and expense: should ‘you incur any in the prem- ises. : ~ By doing this you will greatly oblige. Yourstruly, R. H. McDONALD Jr. ° On the very mext day a recelpt for these bonds was made out on one of the letterheads of the Pacific Bank, and | was as follows: SAN FRANCISCO, Cal., April 14, 1898, Received of Pacific Bank twenty bonds. of one thou- sand dollars each of the Blue Lakes Water Compa- ny—first mortgage bonds, No. 842 to 861, both inclu- sive M. d. McDONALD. - By C. E. Anderson. As already 'indicated, Dick’'s corre- spondence becomes of vital importance only at the time when the banks are crumbling, and Dick believed that he has been caught in a trap. His father had fled from the State. Frank Mc- Donald was in the East planning a gi- gantic manipulation of the bank books which Dick carried into effect. The ‘| banks were being robbed in every pos- sible way, but Dick was committing the crimes. His situation finally be- came desperate. The Bank Commis- sfoners would no longer tolerate delay. Pastern banks were demanding the money that the McDonalds owed them. Money was not coming into the Peo- ple's Bank fast enough to make the|: stealing at the Pacific Bank suffictently profitable. The managers of the Peo- ple’s Bank were becoming fearful of the prospective action of the ‘Bank Commissioners. E: BLEEDING THEPEOPLE'S BANK TO SAVE THE PACIFIC. Attorney General Hart had acted most shamefully, but it seemed as if the Bank Commissioners,. for the sake of their own personal honor, would not permit him to delay longer. For these reasons R. H. McDonald Jr., caged like a rat behind the screened counters of the Pacific Bank, dispatched to his brother Frank a series of most inter- esting cipher teleerams. The cipher used by R. H. McDonald Jr. was a very: simple one and at the same time a most effective one. He would write out each dispatch in full, then divide it into two parts, sending every alternate word by one of the two great telegrgph cempanies and the other word by the other telegraph company. Or, to put it more plainly, the ‘rst word of the dispatch was sent by the Western Un-| jorr Telegraph Company and the sec- ond word by the Postal Teleégraph Company, and so on in alternation to the end. R. H. McDonald’s first cipher dis- patch was a frantic cry for $50,000. - He The Bankers Juggled in Vain With the Bonds of a - Corporation. The Secret Operations of the Schemers Are Revealed in Telegrams. : Dick Begged an Opportunity to Save a Little From the Ruin for Defense if Arrested. asked his brother to see if that sum could be borrowed from New York banks or could be realized from electric railroad bonds or the John Brown col- ony. If these avenues were closed Dick declared that he would demand the amount from Farnum, the manager of the People’s Bank. There could be no clearer proof than this cipher dis- patch of the fact that the People's Home Savings Bank was being bled to put life into the decaying body of the Pacific Bank. The dispatch, after the cipher has been removed, read as fol- lows: Ry Cash low. Within a week must have fifty thousand. If you know Electrice or Colony will give that don’t borrow. Otherwise try and borrow. If you fail I will demand of Farnum. Try Chase and then Park, then Merchant. Dyer high- er, five thousand amount. DETERMINED TO COMPLETE THE ROBBERY OF THE PEOPLE'S BANK. In the next cipher dispatch R. H. Mc- Donald Jr. wires his brother in sub- stance that all hope is lost unless they can keep Farnum, the manager of the People’s Bank, from diverting any of thé sums of the People’s Bank away from the Paclfic Bank. Frank Me- SAR-FRAWCISCO; OAL. . BEUE AL 1803 > L : . We veg to inform you thev we have In our pessession, Buy which wmay have been mislaid, Twenty Bonds of Blus Lakes Webed - Conpany, ¥o's 342 to 861 consecutively’ ans snclusive; eech for thesulm of One Thomsan Dollars, dsted 31st Decemver 1691. - A8 _’u‘ are unable to del i'vm’r these Bonds at present,” we Derety ‘unr and promise to _.a.uver l_nov_to' yai. as soon as they are found. fo ber?by tur:‘tbur _conu‘u‘n and reguest that you release the Morte gage by which the payment of satd Bonds i secared, end in Going thie we hereby sgree te hold you harmless and indemify you ogainst all cost, or earp'nse; should you incur any I the premnises, . - By dofng this you will grestly cblige. . Yours truly, PACIFIC BANK ‘ W?//BMW THE BANKER'S LYING LETTER TO THE SAFE DEPOSIT COMPANY. R. H. McDonald Jr. attempted, two months before the Pacific Bank failed, to re- . tain twenty Blue Lake Water Company bonds that should have been sur- rendered. To do so young McDonald deliberately declared that the collateral could not be found. On the very next day he delivered them to his uncle, M. Jasper McDonald. TS f Besiore: SRS The above receipt Deposit Company had been . Deneald Jr. sent his lying letter. < 3 paying e usval divhlands wehove been enabied o ook, § 150,000 fothe Suplia und durry an/stI8S JRIME DONALD President S 442 & 3. o UNCLE JASPER RECEIVES THE BONDS e —_— Tonk YAl Lepelt. |' Resources $470400000 . shows what became of the twenty Blue Lake water bonds that Dick McDonald declared to the Safe mislaid in the vaults of the Pacific Bank. The receipt was given the day after R. H. Mo~