The San Francisco Call. Newspaper, February 4, 1899, Page 1

The YVOLUME LXXXV-—NO. 66, Call to the Library.++++ This Paper not be taken from SAN FRANCISCO, SATURDAY, FEBRUARY 4, 1899. PRICE FIVE CENTS. PLUNGERS SENT THE UNION BANK TO RUIN Startling Disclosures Made in the Commissioners’ Report. CONCERN HOPELESSLY WRECKED A Coterie of Speculators Allowed to Receive Enormous Overdrafts— Attorney General Will at Once Insti- tute Suit to Declare the Bank Insolvent. HE Union Savings Bank of San Jose will not reopen its doors. The institution has been wrecked, and Attorney Tirey L. Ford at the instance of the Bank Commissioners will at once institute legal proceedings to have the bank declared insolvent. The concern will then go into liquidation, and assessments will be levied on the stock holders to pay the depositors. The Bank Commissioners have finished their in- vestigation and the record justifies the accusation that the defunct institution was managed by gamblers and not by bankers. Speculators and not investors were given financial aid and hundreds of thousands of dollars were loaned with- out proper security to plungers in their wild schemes. In one instance the sum of over $140,000 was given to a single lator in fruit, and not as much as of paper was taken in ex- Not satisfied - ith this vicious the directors of the Union Bank the same man $80,000 more. Five d patrons of the bank were al- i to overdraw to the enormous £ $228,000. One of the directors of the institution was allowed the privi- lege of overdrawing his account $12,000. The spirit of speculation and gam- bling ran riot in the institution and the inev ble crash followed. For many nths the bank was tottering and spec sum th fell. The commercial and sav- 2s elcmenis. of the bank were i~ with the other. Cash re- votved on es in neither department were 4 at the proper point of A little clique of favored ators had full sway and sapped ank at its foundation. The rec- of the “ank fail to disclose any ble frauds. The books under a amination appear to have tly kept. Among the worth- of the institution there y accommodation notes. As far as the Bank Commissioners have i tigated, there is nothing upon which t- charge the managers with a more serious offense than “bad judgment.” The character of that “judgment” may be clearly seen, how- ever, in some of the resultsof the inves- tigation by the Commissioners. In the wreck of the Union Bank one great overshadowing sinister figure appears. It is that of B. Howard, plunger and gambler in fruit, who received from the bank managers an enormous fortune Th in their investigation of the bank’s af- fairs a most startling series of facts. The commissioners reduced the avail- able assets of the bank the enormous sum of $491,411 27, cutting down the in- flated estimates of the bank authorities from the sum of $1,197.479 52 to $706,- 068 25. Bills receivable that the bank at $302,835 48 the com- mi ners value at $146,182 19. Over- drafts that the managers of the wrecked concern estimated at $311,- 302 02 the commissioners declare are not worth more than $126,540 62. In a general summary the commissioners find that the available assets of the bank are $138,215 35 less than the lia- bilities. T is a showing more shame- ful than was that of the Pacific Bank when the first expose of the affairs of that institution was made. Notwithstanding these outrageous facts, nothing more than an accusa- tion of “bad judgment” may be made. This condition of affairs has existed for many months, during which the Bank Commissioners reported that the institution financially sound. Gan and reckless speculators were given the protection of the law to plunder merchants and depositors. On November 21 last the Bank Commis- sioners examined the Union Bank and were thoroughly informed of the facts that are now made public The com- mission refused, however, to close the bank and over two months more were given to the manipulations of the plungers. In this connection it should not be forgotten that A. W. Barrett and B. D. Murphy were not on the commis- sion which was then composed of H. W. Magee, John Markley and Paris Kilburn. As it requires a unanimous vote of the commission to close a bank, John Markley was powerless to act in the face of the adverse decislon of his associates. The significant story of the wreck of the Union Savings Bank of San Jose begins with the examination made by the Bank Commissioners on November 21 last. As already indicated, the com- missioners as a body did not then con- sider the bank insolvent and conse- quently refused to close it. The out- rageous banking methods of the man- agers were palpable facts, however, and on December 3 the commissioners sent the following important letter: December 3, 1898, To the Officers and Directors of the Union Savings Bank, San Jose, Cal.—Gen- . tlemen: The examination resently made TS hopelessly | | by the commission of your bank presents | a condition of the bank's business and its management which does not meet the ap- 5 proval of this board. General | | has resources of $794,46515, and that you | have as a cash reserve on hand in bank We find upon examinatipn that the hank | the sum of $10.575 02 and due from banks the sum of $40,48328, making a total of $51,068 37. his sum is only a fraction over 6 per | cent of your deposit liability. In a bank of the character and importance of the Union Savings Bank, doing the business which it does, you should under no cir- cumstances let its reserve fall below 20 | per cent in cash of the depositors’ lia- bility. The sum now held by you is by this commission considered far below the limit and may cause serious results. It is, in fact, unsafe banking and dangerous in the extrem Again, we find you are sanctioning a practice which this commission has al- ways condemned, viz., permitting over- drafts to such an extent as is dangerous, especially so in the cases of Howard & Co., J. F. Devendorf, Jersey Laundry | Tract, Thomas E. Johnson and the Santa | Clara Fruit Exchange. You have permit- ted Howard & Co. to draw from your bank the enormous sum of $141,728 80, for which amount you have not even taken a promissory note. In addition to this sum you have advanced to him the further sum of $86,500 as a commercial loan, mak- ing a total of $228,220. This is unsafe banking and very dan- gerous for a bank under any circum- stances, and especially so of a bank with a capital of only $300,000, _ It is nearly one-fourth of your loan re- | sources. | In the case of J. F. Devendorf you have Continued on Page Nine. in writing. e+ ReRERIRIRy™ H 23025 AGONCILLO SENDS SOMETHING LIKE AN “ULTIMATUM” Call Office, Riggs House, Washington, Feb. 3. Agoncillo was with his attorneys for several hours to-day, and at the close of the con- ference Lopez, secretary of the Junta, called at the State Department and left another message It is said to be saucy in tone and amounts to an “ultimatum.” It is believed among diplomatic sharps that Agoncillo has a twofold purpose in send- ing this last message. First, he wants to influence Senators who are hesitating about voting ¢ for the peace treaty by making it appear that the Filipinos will give us everlasting trouble, and, second, he seeks to provoke the State Department to give the Filipinos their passports and thereby create sympathy and sentiment favorable to their cause. The Filipinos have their transportation to Canada already engaged. #2530 830 250250000 82083089;82083 SHARINIRR RSB R RoRe[IReR e ReNeRIRoReRN 4N+ R+ R +R4 K] The Representative of Aguinaldo Said to Be Bidding for an Order to Leave the Country. " 3 3 5 g g ? 88 4 8 S K3 S L] PROBABLY - AGUINALDO WILL SELL At All Events, the President Is Think- ing of Making Him an Offer. EW YORK, Feb. 3.—The Her- ald’s Washington correspondent sends the following: Believing the pacification of Cuba is as- sured as a result of the concili- ation of General Gomez, administration officials are urging the President to take action looking to the conelliation of Aguinaldo, and to securing his co- operation in settling the Philippine question. The authorities are confident there will be no trouble in accomplishing the disbandment of the Cuban army. now that its leader has consented ‘to aid the President in bringing peace to the island. General . Gomez's dispatch to the President was most flattering. He presented his compliments and said he would be very glad to comply with the wishes of the President, and that he would go to Havana and confer with General Brooke relative to the settle- ment of questions concerning the af- fairs of the island. Secretary Hay. by direction of the President, immediately sent a congratulatory cablegram to Mr. Porter for transmission to General Gomez. In view of this satisfactory outcome in Cuba it is urged by some that a sim- ilar experiment should be tried with Aguinaldo. Advices from General Otis show that conditions in the archipelago are improving. He says he is confident that when the treaty of peace is rati- fled pll opposition t will Map: 2. General Otis has before been directed to keep in communication with Aguin- aldo and explain the friendly purposes of this Government, but the point is waerican control | made that if the commission now on the way to the Philippines or one of its members should be directed to con- fer with Aguinaldo, as Mr. Porter was instructed to do with Gomez. and ex- plain the wishes of the President. the backbone of the fight against the sov- ereignty of the United States would be broken and a different aspect would b= placed on the situation. Responding to a resolution of in- quiry, the Secretary of War to-day sent to the Senate General Otis’ report on the health conditions at Manila. The report was dated yesterday and, of course, was made by cable. It follows: ‘“‘Deaths among troops in Philippines since arrival to February 1, seven months, 220, of which 41 were due to wounds and accidents. Of the remain- ing 179, 65 died of typhoid, 43 of small- POX, 22 of dysentery, 8 of malarial fever. The remaining deaths were due to many and various diseases. Smallpox causes apprehension. The entire com- mand has been vaccinated several times. Twelve physicians have been engaged for several weeks vaccinating natives. The more sickly season is dur- ing the hot months, March, April and May, when fevers, smallpox and dysen« tery are more prevalent. Nine per cent of the command are now reported sick, a great majority of the cases being slight ailments.” PARDEE TO HELP GRANT AND THEN GET PERKINS' SEAT This Is the Latest Development in the Senatorial Contest. PIECRUST FOR THE SENATOR. Burn’s Touts Using All Their Energies Now to Force Country Members to Come to Their Can- didate by False Pretenses. Sacramento, Feb. 8.— The most significant development of the week in the Senatorial contest is the departure to-night of Frank Jordan for Oak- land for the purpose of bringing to the front Dr. George C. Pardee. The story goes that Pardee and Grant will do Sena- torial politics on the basis of the doctor giving sup- port to Grant at the pres- ent time with the assur- ance that four years hence when Perkins’ term ex- pires Grant will return the support to elect Pardee Senator. Dr. Pardee’s influence as a deadlock breaker will be welcomed heve. Of course, Senator Perkins in Wash- ington may be surprised, as he has been giving his quiet support to Grant CALL HEADQUARTERS, ¥ THE DREAM OF MOREHOUSE AND WORKS. f while writing friendly let- ters to Barnes and Bulla. The Grant men may regard the promise to Perkins, implicd or otherwise, as campaign piecrust and proceed to break it. The touts are disappearing from the scene, but this does not signify that they will stay away from the Capitol. It is highly probable that they will be here in force next Monday ready to badger members on the proposition to go into caucus. For days and days the touts will swarm around the Golden Eagle Hotel and then all at once they will vanish. No doubt they obey in- structions to go home and recruit more touts, or take a run to some in- terior town and make a secret play to get this man or that man to come to Sacramento and urge some Senator or Assemblyman in the Grant, Bulla or Barnes camp to join the scheme for a caucus to break the deadlock. During the past three days Assem- blyman Clough of Plumas has been besieged by touts of the Burns corral. They urge him to join in the caucus scheme. Onme of the men who has been harassing Judge Cloagh {8 from Oro- ville and the other is a well-known tout from San Francisco. The veteran jurist ‘was patient under the fire of many in- terviews, but when he deemed that for- bearance had ceased to be a virtue he told the chief tout to go to the lower regions for a caucus, The incident, so far as it relates to the representative of Plumas County in the Legislature, is closed. It comes to light that special efforts are being ‘made to enlist good-natured but weak country editors in the work of soliciting a caucus. It is known that Mr. Holden, who is here from Wheat- land, has produced a letter from Editor Durst of the Wheatland Four Corners in which the statement is made that the people of Wheatland who once were favorably disposed to Barnes, Scott and Grant are now of the opinion that Burns might be a possible popular can- didate. The clearing away of the cloud on Burns’ reputation is mentioned as a point in the colonel’s favor. No one has presented a petition signed by a ma- Jority of the Republican voters of ‘Wheatland or letters from any consid- erable number of voters asking the Representatives of that locality to join the colonel in a scheme for a caucus. There is hardly a doubt that the plan of getting Holden here with a letter from Durst emanated from the “organ- ization.” Holden will soon return home with about the same sort of feeling that O. A. Hale carried when he.left Sacra- mento for the Garden City. Assemblyman Raub, who represents Yuba and Sutter counties, has had his little experience with this latest thing in the line of Burns touts. Mr. Holden, who, with Editor Durst, evidently con- stitutes that ‘“undercurrent of feeling for Burns,” which is just now inflict- ing the Wheatland district, has made his headquarters at the Assemblyman's desk for the past four or five days and has argued long though rather thick- ly the Mexican attainments and the wishes of the people at home that he be elected. Asked about the matter last night, Mr. Raub said: “Now, I come from a Republican county, and Wheatland is the heaviest Republican district in it. My opponent, a man named Hicks, lives there, but I was given to under- stand that I would run all right, not- withstanding. There is ordinarily a Republican majority of seventy-five in that city, but when the election came along I got the knife good and strong. Hicks piled up a majority of fifty-four on me in that precinct, so when Holden came on me the other day with a proposition to vote for Burns I did not understand it. He said the people up there demanded it, and kept at me for three or four days, until finally I called up the election and asked him what right the people of Wheatland had to dictate to me when they had treated me the way they had. I told him I thought Durst, who runs a paper called the Four Corners, was one of those who knifed me, and he at once either wrote or telephoned to him what I had said.. Next morning I got a let- ter from Durst telling me all this stuff about Burns and how the feeling up there was and presuming to dictate. I got so mad I threw his létter in the fire and wrote him a reply acknowl- edging it, but giving him no satisfac- tion on the Senatorial proposition. “I have nothing against Burns, but I am not going to vote for him. I think we hold the key to the situation, and we would be fools to quit and make him a present of this office when I think we stand the best chance of win- ning it ourselves. That’s the way the rest feel, too. ' If this man Durst wants to represent the feeling of the people of his district for Burns he had better send a more fit representative down | here to do it, anyway.”