The San Francisco Call. Newspaper, November 3, 1898, Page 1

FLUD 1 U tiun to be taken from ' the Library.++++ SAN FRANCISCO, THURSDAY, NOVEMBER 3, 1898. SHERMAN FEARED AND HATED BY ~ THE BANKERS HE ENTRAPPED How aluabl Ases Wore Pled 1o P e Visionary Projects of e AMer 1 sitins Wore Made Hpelisly Tsuvent U - Conspirators Ploted fo Tncrease Their Priva ~Turtunes by Cullng Crodulous . D, Pacifc Bank Wreckers Negotiaed Thelr Worthiess Bonds Throngh 2 New York “Femce.” Frank McDonald Bitierly Denouzced the Los Angeles Manipulator a5 the Intisator of - Disastrous Spectlation and the Caus - of Financial Ruin. /L ‘_’{,rafi. J/d.-/M.z ‘While M. H:. Sherman beélieved that he was-flattering Frank McDonald into inactivity .Frank McDonald wrote the following letter - of- :warning ‘to" his fairs of theé electric road of Los ‘Ange- les, the gigantic scheme into which the McDonalds were inveigled by M. H: ‘Woodard, in.the ‘develop- ¢la: In the recital of the great conspiracy ing ‘each of investments. In ad- that wrecked the Pacific Bank and its to t advertising we shall all personally and we may, in the we are preparing, work up plans feeder, the People’s Home Savings e 3 SR an 5 qui a sale of 8 8, = ik, the correspondenge of Fradls V. | -SHerls fall. We ‘Shal. by oot onis ments of the conspiracy that ruined the | brother: ~* . McDons R most im- | ; little advertising and prln(ln% matter. Pacific Bank, proved a veritable o N. Y., Aug, 17, 189%. McDonald constitute a r . We build no great hopes, but here Nemesis to Sherman. The N¢wspaper | .ny Dear Brother: Enclosed pl portant element. . The letters of Frank we are in the center of the financial ian contributed to -the Los Angeles ¥.P ¥ er: Enclosed please | . market of. thls country and money on Times under the name of “Jayhawker,” | find letter ‘from M. H,, which I are £o0 voluminous that The: Call finds it impossible: to present them all In one | Those that are published this | g, however; | markable story. of fraud, dis- | honesty ‘and theft. When k be- | gan’ writing his’ letters to -his brother | all s seeking: investment. I shall begin h Madera Improvement Com- s stock, as that {s all issued and for working with and ought to a good showing. I wish you please Miner take out safe 5000 shares .and at every opportunity prodded: Sherman and his knavish supporters in the Pacific Bank. In August of 1892 Woodard’s interference became almost unbearable and Frank McDonald wrote to his brother as follows, .promising Dick that at the first opportunity he would kill the newspaper man: wish filed' away. Hereafter we 'will . keep - everything °. from him, as we may need: them to refresh his memory - with. - He seems to forget. things ‘too easily. - I have other “letters’ from' -him -which I shall send shortly. They are long and issue re- ma would from the cashier’s and have them issued in certificates of reveal have $100 each to me on here, s trustee and send Dyer is here and I have had 3 Tow | .Several long talks with him and he is " i i the leading conspiratc wete in ‘\e\\v)‘ anxlous to do_all he can, but it will 3 DEBN{EEY;&RF . u:- | I have mo time at present to answer Y Among them w M. H Sher-'| e a little time to work his various “'ogdard's communication, andthe | them. .I shall sénd on originals and re | “things and if you wish him to succeed the present T conspirator-in-ch Johns, | ‘we shall have to_be patient and help less said about him for . | answers to you,-the latter for + .1 a ¢ ¥ ter. 1 do hot think you need : TR L0 you, i N or you to Dr. R, H.-MdDonald, Dr., W, J, Jen-| -pim 1 am glad Johns is coming and A Bwits vet, and if we do 1o not:-|forward, the former to file away. ningson, ‘W. H.: Egstland and-Edmin- | need T am here handifed without thinkc “he_fs ‘the best ‘ane we. can..| Your loving brother, ~ FRANK. 2 AR ation I need. our loving e i 5 : B B R ster & ‘Son. VK. i ith him, but the less: the’ bet: : brother, - = —— e I8 v all parties, as vou must well |[FRANK :MATCHES ‘HIS CRAFT e it = =—— know. 1 have never settled aecounts: . with -him yet, but 1 expect to: one of these days, and when I do he will ‘trouble us no more, and I.doubt if - he will .worry anybody else. His cake is cooking ail unbeknown to Mim, and After. due . deltberation agency of: the conspiracy -was organ- | ized ‘under the name of Edminster & | Co. - This concern swas_simply nothing | =——— —————— BITTERLY DENOUNCED BY HIS DUPE. | TRYING TO GULL THE PUBLIC WITH WORTHLESS BONDS. Frank McDonald €ound that it was AGAINST HUNTINGTON. ‘A ‘few ‘days after.Frank permitted his feeling - with Teference to . Sherman to .explode he wroteé Dick he. was on the more or:less than a’ “fence” fér the Mc- |.easier to plan than to succeed in ob-| The cons; 1 Vi 1 at cross purposes. When Frank - McDonald he is fortunately supplying the ‘fuel 5 pirators that had made the two banks insolvent were always purp 1 e s fort y 1 : Dorialds. - At this-time the schemers | taining money in New York. Securi- realized how worthless were the bonds of the Los Angeles Electric Railroad he wrote the _abgve letter to thhns : §‘r'§§vyne‘§§’ott°fnem§fl§i ltyoglgn‘?_w;.gé gi‘ifl"eh?lofi’f&‘&?é?,gt’g’fifé il&é{vl;sfi were in the greatest distress. . Plot af- | ties of the Pacific Bank were known to brother. There are few epistles in the long correspondence that are more bitter in their enuncfat‘ion an o L ey . "FRANK. Bigod - Pramk. . pernaitted & ; second this. thought to intrude and allowed himself be worthless and could not be floated as, readily as Frank McDonald sup- A . PROPHETIC. WARNING TO| ter plot was hatched to float.the worth- to realize that the death of Dyer would léss bonds ‘and ‘securities of the bank. A O ¥ foh £ Ne R b can. Your lov- B .°| bring. mo money" to the Pacific Bank. ©a.all ‘sides the manipulators were ha-{ p:;egoxngnxet?fr.v;:y:—:{a;‘o“nwm‘ e flg”&?‘{fla";:;‘;’,,’:ufi’,f ;:":;e m;e':;- HooR Phe Buaueil N O o fn!g hlemer.m o ol F&ANK.V BEWA,RE OF A“x H: S’HER'_" . He wrote as iol]_ow rassed by dlsturbers and blickmailers: | I have not dared to take up the bond | York agency through which the Pacific| FRANK'S CRAFT Y SCHEME TO FRANK THREATENS TO KILL| - SANEND R T IHivE watEed sacty. atd tate 45 get For - the first .tlme ‘& newspaper .mgn, fl‘:_fi:“?nbectm::\x gloym\:eafi d’o:g;u:_r- Bank and its dishonest managers DECEIVE THE EASTERN “~] During the months and Vears-that| things as far as they are, for I have Snowh. tinder. the nom -de ‘pluime of | - £00-active in certain girections. Fn - | Hoped to foat the worthiess securftios JAYHAWKER, | were: ecupled. in -ruining the Pacific, ‘if,%k‘ii'::‘,"’.‘;”f"flv"fi.g“‘y'.’:‘émEZi‘Sm s ase I find the New York markets un- | The advertisement read as follow; BANKERS. Benk Dot bpe of the manipulators in- - things that I sometimes feel like kill- Through all the troubles of the Pa- “Yayhawker;” énters ‘the .story-4s a |- desirable. since we _are fre = : r : ; 3 quently Gold ; . ing .him, but:that would not bring us ihi eharacter. - The.time had net | borrowers here anfl an application b: o _| cific Bank, a Colonel Woodard of Los | volved-trusted another. R. H. McDon-|: him, T e roatts. poa | e might b taiwed around, T shall iy Investments oo the next letter that Frank MEDOR. | 3 ngeles was on the. track of thes Me- | ald Jr. ‘was atéaid o s biothec; his e e S S = # kg Fode AR e a- In Amounts of : Iy | Donalds and the schemers who sur-|brother was afraid o m; both were | successfully; therefore I am patient. thélr. assoclates had: to” proiect them- | .delphie end othér places Where e | o) o' Tuand to Sutt Tnvestor. | signincant a reference which is deeply | [iied them. — Woodard had been a.|Afraid of Sherman; all of them dis-|. But the thing from which I nope ths selves against the action of certain | ‘smaller amounts and lower rates of {# - e eane estor. | S tton, I H. McDonald Jr. sent | newspaper man and was then a lawyer..| trusted Johns and Johns succeedéd in | ‘most-and which 1 feel we can all take . it by TRt ¢ | interest. But I prefer to walt for | Interestat, 6, 8and 10 Per Cent. | Va8 Wrlton: steh begging his brother | He was thogoughly informed on the af- | cheating them all. ..+ | bowdly and push to a big success and, niewspapers in_this city. hat part of | with his statistics. T inclose GILT EDGE SECURITIES. to g'fve him the opportunity to rob the - " ‘s great-day ot our. lfimfii‘é‘;‘n"i& the story: is’ of. subsequent ‘development rough proof of a newspaper ad- o ourselves individually, is a plan I have z - 5 | Vertisement such das we intend insert- For Bank References and Full Pacific Bank. That Oppoflunity was ourselves in ;:gp:llul;?eexplmted by The Call-at lhei ing just as soon as we get facts to Particulars Address or Call given, and in the letter which Frank 4 _.jfi%‘;z:wk' l;mtdtz_, g:‘acteh:. !snegr{g; 3}1 lgrel prepare our circulars with. Do not let McDonald wrote on August 9, 1892, he . : @R letters that. wrc -published ‘this | Ty Doy ee L A e e CALIFORNIA says: /}‘M '}M . S E i i et wpheme o B or work, - In this way.we shall work Investment Agency, = vou know. AS a -proposition I think “I had to come back to New York to attend to the Chemical loan matter.” Continuing, he declares: “We are trying to get our investment agency plan into shape, and I intend to try and sell a lit-| - :{t beats anything I ever saw in attrac- tiveness, . and the -best of it is, it's . true. If-wé.can’ only: get this thing started, it will be a mint to roll money Dyer’s property right along with our _own, whether ‘he works or not, and in addition we shall do all. 'we can by persohal labor. morning have a. most-important -bear- | ing .in reévealing some fac n the con- nection .of M. H. Sherman with the Mc- | 96 Broadway & 6 Wall St., N. Y. City EDMINSTER & CO., Managers New York Department. Dondld - :banks.: - Thése. letters were In regard to bond loan matters, I 1o 88" ydu, -and-then: We ' hold: oo ¢ i R shall try a different course hereafter. tle of everything we have, so as to con- | % i it written . long " after” -~ Sherman 'had| 7y gnall offer my individual notes, se- For nearly a year after the organiza- | vert as much as possible into money. I| fl“gflgér‘!u?:-;%% A tha trol. ‘company -the Mohawk Valley Orange Grove- and “Fruit Company. We sell = shares ‘at $100.-a share, yielding 2 $640,000, allowing 10 per cent for com- . missionis, _etc., .in - starting, leaving $576,000,. the . money all to go into the ° Pacific Bank, I' to be the treasurer ..:and one of ‘the trustees for the seven years” management. -So you see the money will stay with us. 'Conndenualll. Edminster, you and I .. “each: to -get. $42,000 out of .it at the end -of seven years, each year to be set aside for that purpose. _ Pacific., Bank:to get $15,00 and the _other frustee .$18,000 and the Mohawk Canal’ and .Improvement -~ Company about $35,000. I-am. trying to get the “stock rushed along; but - everybody " herg. in-business is so slow it fairly drives you wild. J* * I wish- you would please see Dorn - at onc¢e and find out whether our sec- “tion. five in..Mohawk is all proved up and ready for transfer, because at a Yery qgrly fate I wish it deeded to'the _ New.Orange Grove and Fruit Com- pany. - I' suppose much of what I am writing - seems -like. wild nonsense, but I hope the.sequel will not so prove. -But this Is only one of many sources ‘from_ which in due time a harvest will have made up quite a list of things with | Dyer and myself and I have put in a lit- tle Pacific Bank stock and People’s Home and other things to maks as characterful a list as possible. How we shall succeed, goodness knows, but this i{s the place to | make a good trial. Your loving brother, FRANK."” THE CAUSES OF THE RUIN OF THF RIVERSIDE BANK. While ft was the policy of the Me- Donalds to correspond with each other every day, Frank McDonald did not again write to his brother until August 17. He then penned a letter that ex- poses completely the dishonest schemes between the Pacific Bank and the Riverside Bank. The financial fancles of Frank McDonald, in connection with the Riverside project, cost his father's bank over a quarter of a million dol- lars. Frank McDonald led O. T. Dyer into chimerical projects. D. S. Dorn and others were used as instruments to further the scheme and in the letter of August 17, 1892, Frank McDonald ac- trapped thé Pacific Bank into the Los Angeles . E. ric- road-dedl, and-Frank had begun to realize- the: character of the ‘crafty -manipulator- who. had" in- veigled him- into:thé Los’ Angeles ‘déal. The young banker abused Shérman in the most. intemperate’ way. and- with something 'of prophetic. sense. warned cured by & certificate of deposit in my name in our bank for the same amount and time, and, If possible, half the amount in Electrics. That will leave tion of the Edminster Agency the Mc- Donalds, their parasites, their agents and their supporters maintained their us all the other Electrios for what- |headquarters in New York. From ever needs we may have. 2 this headquarters, a coterie of flatter- - FRANK. ers, gamblers and financial sure-thing The advertisement.to which Frank | men organized their efforts to impose Your loving brother, MY awgiry e Pl s his brotheér. to beware. - While. barikers and creditors wWere clamoring - on. all |:. ; cial dreams floated through’ the brain-| i of Frank MeDonald:. :In one of these j | pective. fortune. for himself; his brother | | JL"P Dick and Edminster out of the. fiinds pany was'to be formed out of thé Mo- hawk venturé, in which D::S. Dorn will Al “a . whole, ; these.-letters - will _shed great -light ‘upon- the .Secret- operations sides for money, new-and crazy finan- | schemes thé young bankér saw a pros: of the Pacific Bank.”.:A dishonest ¢oni. | - gure -prominently, if not creditably. of the. Paclfic Bankers and their para- e fi b gyt thehm?m‘?aleléymotmv ““:3! “Byér saw Huntington and 1s to ses A GREAT NEW YORK “FENCE” O o otk fhe Dacific "nim again soon with Stubbs, ‘H. is Bank and helped to wreck the Pacific _bitter -againist -Fred Crocker for buy- Bank. The letter follows: N. Y. City, Aug. 17, 1892 My Dear Brother: You entirely mistake my feelings with regard to D. If anything, I am more incensed toward him than you since I am the one most lsr?ely responsible for the osition in which he has placed us, but feel if there is any way to get our money without closing him up and we can follow it in safety to ourselves we ought to choose it. You send me on, and him on here, and Johns, and . ing- that’ Redland. road, then not: get- .ting possession of .it. - He says "he, % buys no.more-roads until he ex- -~ amines them. -He is willing to pur- .chase, -but says $328,000-{s too high for _control of the road; talks about $200,- 000 being all that it is worth. -Says e is going to be out there in Novem- ber and "will look at the road, and if cceptable will probably purchase if .terms can be agreed upon. "He has bought Mrs. Colton's place - and_expects to make San Franciscé ‘his-headquarters in the future, spend- ORGANIZED: In August; 1892, Frank McDonald was in:Néw York; the Pacific Bank had.al- ready been . 'wrecked and. Frank Mc- Donald went East with the deliberate Purpose of attempting to foist upon the public the “worthless securities of the Pacific Bank. The brothers were then ready to-steal and-lacked only the op- portunity. - In”explanation of his ef- forts- and those of the elder McDonald Frank wrote to Dick as follows: - E 5 New York, City, No. 1.Gramercy Park, Aug. 4, 1892. My Dear Brother: The Norfolk land, pa says, . there is no’ use trying to sell untll sote -one_with money wants it. The -offers_he had represent little or no cash. . He is ready to sell whenever there are any genuine buyers. For the resent you cannot expect anything rom.that quarter. Remember you can _push ahead the perfection of title to his Sacramento-street lot and get from that $5000; also have some good real estate man (Toy seems to miss fire on that plece) sell that Washing- ton and Jackson lot. You should get 314000, but say $12,000. Here ought to be 000 dead sure in the next ninety days and. there s considerable other real estate from which you could real- ize, 1 think, by having some one give we barely reach here and have no time to turn round to see what may be done when you say, no use trying, let him go. Now, unless you are un- able to carry on the ltrume for him any longer I think we all here ought to have a trial and see what can be one. 1 promise nothing, count on noth- 4ng until actually accomplished, but there are possibilities here, perhaps even great ones for us, and in a few weeks when once we get the machin- ery started we may be of material assistance in lightening your burden. But this® is hot summer, no one feels much disposed to business, so many people are out of town, and we have all come here without the mate- rial properly gathered and in business shape to work with and California 3500 miles away. Everything we need, - ing much of his time there. He talks bitterly. about Fred Crocker, and evi- |- dently dges not like him for standing up for Stanford. H. is very unin- formed about Southern California, and ~ has absurd ideas of its resources. and possibilities. - Of course he is trying to- bear the property, but all the same he displays great lack of concise in- formation of that part of our State. I am doing all 1 can to bring this mat- ter to a head, but whether anything ceomeh of it I am unable to say. k‘How- ver, we_are not lookin; ack, but ahead. Your ' loving brn%her, |FRANK ' PLANS TO DECEIVE * SHERMAN WITH FALSE _ ...~ CONFIDENCE. systematic attention to it. one, twc_}mthree mweeksexo'r‘ a raomlh -5 a admits that those outside lots away. ngs ove peratingly 2 - that Toy kot him into and that his slowly and the Very thing You e e s b e :Aggrlx)mo g mentioning is the most difficult of to dispose of, namely, D. stock. I ex- pect sooner to sell some of his other M. H. Sherman. to quarrel with Sherman although both $42,000 overdraft represents are turn- ing out poorly, s6 I dg not know how Frank urged Dick not you are going'to get and dispose of that. r):)(n;yg;t g‘mfimfi roperties than to realize on that. realized- that ‘Sherman had involved though you will ‘find. that from your Rhat must be handled very gingerly, them in a disastrous speculation. or all our efforts will be set at naught. real estate you can realize more quickly than fro son we wish to sell the wat Frank, with the cunning that after- more energetically hangien rSnterd e oo is firat 15 that thers ‘1o s ward suggested his gigantlc scheme to e . was e = market for these and even if we get only. $60,000 or $75,000 out of them, that is a good help for a starter and we must not despise little helps all the iving for large ones. ed working that the min, - tric road gave me a free l:rgle)nx}e,:l.dec I see by the printed statement fhat Murphy has not yet reached the point tive. fact that Sherman was necessary. In begging Dick to be shrewd Frank wrote: :; A of moving the earth, and it unload & fow more on him hey'::'lnlc?s: in a box. BEver since I have been here 1. have been trying to devise some way to sell our Madera and Mohawk properties and help Dyer unload his various matters, and 1 think we may do it by opening a California Invesf- DICK TOLD TO BEWARE OF SHERMAN. After Frank McDonald went to New York, in an ve'flort to drag the Pacific while we are stri Mr? Clark will, he says, e more of the water company’s paper, and the Park will probably give D. hi d w{fi ?ry b 1 m, and we before long materialize soms in coin for you. If we find the task hopeless ,vwe?:ill GREAT EASTERN “FENCE” ORGANIZED, ‘When Frank McDonald went to New York to attempt to fioat the worthless My Dear Brother: There fs no_use in further discussing the Dyer mat- ter. {:‘l all ut‘:ll . S Y%‘; gr;y”"l:‘ fls};.y ex n, r idea pat lmfe hplm.‘ at is simply absurd. But as you continually act on that theory, ou paralyze more or less all our ef- ment Agency, of which Edminster & shortly notify you and then you ca here. It almost seems that tise choice investments, bea:1nn ads‘:el;' letter warning his brother to preserve the correspondence of Sherman. It m‘fl,fimw"’;&r in. ,nl&:m_ - Bank. This concern was to be the mask behind which -the McDonalds,, M. °",‘f' us,“;:.dy to ctlh‘,:. him’ o:? 'in:x;'_' g‘ l'.lzflplroa {':rr cfi‘;é‘fu :;te!;ent. n.mf shalf may be some satisfaction to the public to know that Dick obeyed the in- while tion all you H. Sherman, A. F. Johns and the other manipulators were to operate. you wiil do it and end the matter atter describ- Jjunction absolutely. . ; as Edminster & Co. 3 your own way. me for can, for if the let The establishment was known o