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# EDITORIAL COMMENT
# WHY NOT OPEN THE SOLVENT BANKS?
We have up to this time refrained from going into the case of the closed banks in this State; but we feel that the time has come when to remain silent any longer would not be subserving the best interests of the State and of this community in particular.
The Bonanza this morning feels impelled to ask the question that has been uppermost in the minds of everybody for the past two months: "When are the State Bank and Trust Company and the Nye and Ormsby County Bank going to open, and how are they going to pay their depositors?"
The Bank Commission, through the State Bank Examiner, has examined the banks and has pronounced both of them solvent. Now, if the banks are solvent, why do they not open, and why do they not pay their depositors?
In the same sentence that the Bank Commissioners declared both banks solvent, they urge upon the depositors that they sign the agreements to accept ten per cent of their money in three months after the banks open. The Commission says the banks are solvent; T. B. Rickey and his directors say that the State Bank and Trust Company is solvent; Frank Golden and his directors say that the Nye and Ormsby is solvent; then why do not the banks open? Rickey has pledged his private fortune to the depositors of his bank; and Frank Golden, not to be out-done by Rickey, has pledged his private fortune to his depositors. Then why do the banks not open?
It is quite evident that the bankers have been indulging in a game of bluff. When a receiver for each bank was mentioned there was a virtuous howl of indignation went up from the president and their directors. There was talk of bringing in reserves, but those reserve funds have as yet failed to materialize, and the banks have failed to open. They have been closed two months, and we would like to be informed where there is any warrant in law for such a proceeding? We would like to know where there is any other State that would have stood for such trifling. In Other States the actions have been prompt and expedient.
In this State the bankers tell the depositors that they must wait until they get good and ready to open and give them back their money. In other States there are bankers in jail because they cannot pay their depositors. We are not advocating any such strenuous measures in this community, but the Bonanza is the organ of the people and is going to insist on the people receiving fair play.
Time and again we have been assured that the banks are going to open. Now, we are told that they may open on January 2d. When the Nye and Ormsby closed its doors, we were told that the bank wanted time in which to get in its reserve funds, which would not occupy more than a few days. Then the Governor of the State went to the rescue of the banks by declaring legal holidays for indefinite periods, and the Nye and Ormsby posted a notice on its doors that the bank was closed in consequence of the holidays. Then the statement was made that the bank had to close on account of holding the paper of the State Bank and Trust Company. This was specifically denied by the State Bank and Trust Company.
Now both banks seem to be operating on a mutual salvation basis, their policy being what is best for the banks, unmindful of what is best for the depositors, or of the rights of the depositors. True, they had holidays in California, and that they have them yet. But during the holidays there was a run on the California Safe Deposit and Trust Company, and holiday or no holiday, the bank was forced to close its doors. The directors and the president declared that the institution was solvent, and they were given shrift to prove their assertions. The Bank Commission stepped in right away, and demanded to be shown. The president of the bank was given time in which to reach San Francisco from the East, and shortly thereafter the Attorney General was asked for permission to commence proceedings against the bank. There were securities missing, and three of the officials were swooped down upon and landed in jail.
These gentlemen were not permitted to tell their depositors that they must sign an agreement and wait for their money a year. Cashier Cushman, in an interview last night, tells what will befall the depositors who may not sign the agreement. "There may be several suits started,' he says, "but the bank will find protection in the report of the State Bank Commissioners. Suits of that kind would take several years to settle and it is a question in my mind whether any would be started."
How's this? Are the banks governing the Bank Commission and the courts as well? Several years to get the money which was so confidently placed in the keeping of the banks by the depositors? This is then how it is proposed to pay the depositors. If they cannot pay the ten per cent in three months, why then those who have signed the agreement will have to wait until the banks can pay it. They may have to wait several years. And Mr. Rickey and Mr. Golden each says that his bank is solvent. And Mr. Rickey and Mr. Golden each says that his private fortune is behind his bank. Several years behind them, doubtless. It is pretty near time that both banks issued a statement which would be intelligible reading to the public, and showed the depositors just where they stand. The statement issued by the Bank Commission is a farce.
The report of the Commission s an abortion; it is a disgrace to the State, and the saddest part of it is the signature of Governor Sparks at the head of the Commission. If a report like that were to be made to the Comptroller of Currency, somebody's head would go into the basket and somebody would be ridiculed out of office. The Bonanza is not going to let this matter rest where it is. This paper will follow up the proposition until it is ascertained what are the rights of the depositors, and how far the law can reach into the affairs of the banks. We demand to know, if the banks are solvent, why do they not open; if they are solvent, why are they not paying their depositors?
