Clearing-house refusal and examinations preceded suspension; receivership followed within two months.
Events (3)
1.June 23, 1893Run
Cause
Bank Specific Adverse Info
Cause Details
Large indebtedness, speculative loans and inability to meet clearing-house/coin demands prompted depositor concern and withdrawals
Measures
Clearing-house banks discussed advancing coin aid (up to $300,000) and communicating with New York; bank directors decided not to open to realize assets and prevent a run
Newspaper Excerpt
It has been known among the bankers of this city that the Pacific Bank has been for some time past showing signs of retrenchment...the 20th inst., when...presented a statement of the condition of the Pacific Bank, and made application for financial aid in gold coin
Source
newspapers
same day
2.June 23, 1893Suspension
Cause
Bank Specific Adverse Info
Cause Details
Clearing-house refusal to accept the bank's paper after assessment of its weak condition; heavy call liabilities and inability to secure sufficient coin funding
Newspaper Excerpt
In consequence of the notice from the clearing house, that its paper would not be accepted hereafter, the directors of the Pacific bank decided not to open the doors in the morning.
Source
newspapers
+53 days
3.August 15, 1893Receivership
Newspaper Excerpt
Sheriff McDade has been appointed Receiver for the Pacific bank by Judge Levy. His bond was fixed at $100,000.
Source
newspapers
Newspaper Articles (25)
1.June 23, 1893The Morning CallSan Francisco, CA
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THE CLEARING-HOUSE. Statement of the Circumstances Leading to the Suspension. John McKee, cashier of the Tallant Banking Company and president of the Clearing-house, was found at his residence on Twelfth street last evening, discussing the situation with Charles Sleeper, the manager of the Clearing-house. Mr. McKee was asked to give a statement as to the affairs of the Pacific Bank and its dealings with the Clearing-house, which he did in the following words: "It has been known among the bankers of this city that the acific Bank has been for some time past showing signs of retrenchment and inability to control and successfully conduct its old-time large and profitable business; but it paid its Clearing-house balancea, and did not manifest any weakness to the Clearing-house in a formal way until Tuesday, the 20th inst., when, at a special meeting called for the purpose, Frank V. McDonald, the cashier, presented 2 statement of the condition of the Pacific Bank, and made application for financial aid in gold coin, to be secured by the deposit of sundry securities. "Mr. McDonald stated that $150,000 in gold coin would be amply sufficient to relieve the bank and enable it to tide over the present pressure until other funds could be realized from other sources. The clearing-house banks agreed to extend the desired aid even to the extent of $300,000. provided that it could be shown that this amount would insure adequate and permanent relief. A committee of able and sympathetic men was appointed to take the matter in hand to communicate by wire with New York and report the result obtained at a special meeting to be held on the following day. It appeared at the meeting on Wednesday that the conditions were such that the proposed amount of $300,000 would not insure adequate and permanent relief to the Pacific Bank for the reason that of an indebtedness aggregating nearly $2,000,000 there is $1,300,000 due on call at any time and $300.000 additional due to New York banks in July and August, but which they agreed. on payment of some $70,000 in cash of an overdraft in New York, to extend for ninety days. "After careful and prolonged considera tion it was the combined judgment of the clearing-house banks that under the present conditions a much larger amount of
2.June 24, 1893The Salt Lake HeraldSalt Lake City, UT
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PACIFIC BANK CLOSED. A San Francisco Institution Failure That Caused No Surprise. SAN FRANCISCO, June 23.-In consequence of the notice from the clearing house, that its paper would not be accepted hereafter, the directors of the. Pacific bank decided not to open the doors in the morning. It has been known for some time that the bank was laboring under financial difficulties, so the failure is not a great surprise. The bank has a capital of a million dollars. The nominal reserve is $700,000 and the deposits $1,000,000. It is expected that the depositors will lose nothing. Manager McDonald says the bank will resume in a short time, having suspended merely to realize on the assets and prevent a run. The failure also involved the People's Home Savings bank, a collateral institution, under practically the same management, with a capital of $1,000,000 and deposits amounting to $1,700,000. This institution closed its doors also. The other banks in the city are financially strong and it is not |believed that any runs will be inaugurated as a result of the suspension of the Pacific bank.
3.June 25, 1893The Seattle Post-IntelligencerSeattle, WA
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Confidence Restored in was Francisco. SAN FRANCISCO, June 24.-There was nothing around any of the banks this morning to indicate any excitement. Small groups of men stood on the sidewalks in front of several savings banks, but there was no attempt at a run on any of them. The San Francisco Savings Union reported a greater amount of de. posits than it had received on any one day for a month or more. A number of persons who had withdrawn their accounts from the Hibernia bank yesterday called at that Institution this morning and wanted to redeposit their money, bus they were informed that their deposits were not desired. R. H. McDonald, jr., stated this morning that the Pacific bank would open again soon. There was nothing out of the ordinary at any of the commercial banks.
4.June 25, 1893The HeraldLos Angeles, CA
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PACIFIC COAST BANKS. Nearly All of Them Have Asked Permission to Reopen. WASHINGTON. June 4.-Comptroller Eckele this morning received a telegram from the Pacific bank of San Francisco, asking permission to reopen. He answered that he would consider the request when his examiner made a report. Bank Examiner Lazar, who is at Los Angeles, has been detailed to take charge of the San Bernardino bank, while Wightman, examiner at San Francieco, will relieve him at the first named place. Bank Examiner Clare of Tacoma has been detailed to go to New Whatcom. An application has been received by the comptroller from all the banks in Spokane, requesting him to allow the Washington National bank of Spokane to reorganize. The board of trade of San Diego, Cal., and the president of the suspended First National bank of that place request that that bank be allowed to resume business. The request will be considered when the examiner's report is in.
5.June 25, 1893The Daily Morning AstorianAstoria, OR
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FINANCIAL CIRCLES ARE EASIER One of the Suspended Banks ill Los Augeles Re-opens. QUIETNESS IN 3AN FRANCISCO Comptroller Eekles In Receipt of Several Application s to Allow Banks to Resame Business. Associated Press. Washington, June 24.-Comptroller Eckles this morning received a telegram from the San Bernardino bank asking permission to reopen. He answered he would consider the request when his examiner made his report. Bank Examiner Clare, of Tacoma, has been directed to go to New Whatcom. An application has been received by the comptroller from all the banks in Spokane requesting him to allow the Washington National Bank of Spokane to re-organize. San Francisco, June 24. There was nothing around any of the banks of the city this morning to indicate any excitement. A number of persons who had withdrawn their accounts from the Hibernian Bank yesterday wanted to re-deposit their money today, but they were refused. R. H. McDonald Jr., stated this morning that the Pacific bank would open again soon. Los Angeles, Cal., June 24.-The East Side Bank opened its doors this morning. This is the first of the closed banks to resume. A feeling of confidence has returned, and the other banks will open Monday-that is, all but the City Bank, which is in the hands of a receiver. Fresno, Cal., June 24.-The Loan and Savings Bank of Fresno announced this morning that owing to the failure to secure expected funds, it would not open its doors today. The announcement created no excitement, as it is well known that the assets of the bank are four to one of the liabilities. Chicago, June 24.-The Columbia Launch Company, an excursion steamboat line, recently organized with a capital of $200,000, has gone into the hands of a receiver.
6.June 25, 1893Morning AppealCarson City, NV
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A San Francisco Bank Goes. The Pacific Bank, of San Francisco, run by McDonald, the vinegar bitters man, has failed, and the excitement in San Francisco yesterday was even greater than witnessed when the Bank of California went under.
7.June 29, 1893The HeraldLos Angeles, CA
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THE LATE MADNESS AND THE TRUTH. It gives us great pleasure to be able to assure our readers that the national banking commissioner, Mr. Wightman, takes the most encouraging view of the reopening of certain Los Angeles national banks that were closed under a wild and unreasoning clamor, which fortunately subsided last week. Certain banks were closed that absolutely fulfilled every condition of wholesome financial institutions. They all had the resreve, and more than the reserve exacted by the law in the case of national banks in cities of the size of Los Angeles. One of the national banks which was closed had more than twice the reserve exacted by the carefully framed laws of the United States. It had twice the cash on hand exacted in the case of the Bank of England. Facts like these emphasize the wanton character of the runs that were made on our local banks. In the case of the run on the Pacific bank of San Francisco, which has been for some years regarded as a speculative institution, the people who started out to wreck that bank talked about its having $580,000 invested in the electric railway system of Los Angeles, as if that were of itself an appalling thing. If the woret financial indiacretion committed by the Pacific bank of San Francisco shall prove to be the money inveated in the Los Angeles electric system it will turn out to be able to pay all its depositors, and will make its stockholders feel very cheerful as a result of its liquidation. The Los Angeles electric railway is & gilt-edged proposition. It paye now and will pay heavily in the future. The Los Angeles banks have gone through a fiery ordeal and will come out as the thrice refined gold.
8.July 7, 1893The Daily Morning AstorianAstoria, OR
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A SATISFACTORY STATEMENT. San Francisco, July 6.-The state bank commissioners this afternoon completed the examination into the Pacific Bank, which recently suspended. They find that the total resources of the bank, estimated at a fair marketable value, are $1,868,000. The bank will probably be reorganized and resume business.
9.July 7, 1893The Salt Lake HeraldSalt Lake City, UT
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THE PACIFIC BANK. It Will Be Reorganized and Resume Business. SAN FRANCISCO, July 6.- The state bank commissioners this afternoon completed an examination of the financial condition of the Pacific bank which recently suspended. They find that the total resources of the bank estimated at a fair marketable value are $2,100,000; total liabilities $1,868,000. No account was taken of the capital stock or surplus. The commissioners regard the bank as solvent so far as ability to pay depositors is concerned. The bank will practically be reorganized and resume business.
10.August 5, 1893The Morning CallSan Francisco, CA
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BANK OF RIVERSIDE. Its Connection With the Defunct Pacific Bank. RIVERSIDE, Aug. 4.-The recent expose of the financial status of the Pacific Bank of San Francisco by a paper of that city created quite a sensation in this city to-day from the fact that the affairs of that bank and the suspended Riverside Bank are so closely Identified. It was not known that the bank here was so heavily indebted to the Pacific Bank, and when it became known many depositors of the local concern were startled, to say the least. The work of securing names to the contract agreed upon by a meeting of the depositors of the local concern progresses, but it is found slow work to secure the last few names, as their owners are nonresidents. It is rumored that the bank has made collections sufficient 80 far to pay depositors thirty-five cents on the dollar. This figure will be very materially increased.
11.August 8, 1893St. Paul Daily GlobeSaint Paul, MN
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EMPIIED THE BANK. Sons of a Wealthy Banker Steal Nearly a Million Dollars. SAN FRANCISCO, Aug. 7.-The looting of the Pacific bank, of San Francisco, by the sons of old Dr. R. H. McDonald has caused a sensation here. The failure of the bank was bad enough, with more than $1,500,000 loaned on poor securities and speculation investments, but the examination of the bank commissioners has brought to light gross peculations that may yet land the guilty persons in state prison. The two brothers have obtained from the bank within four years fully $800,000, for which there is nothing to show. It has also been discovered that just before the bank suspended young Richard secured coin and easily convertible bonds amounting to $97,000, and that this sum was taken to New York last week by McDonald's confidential clerk, A. L. Jenkins. The only security for this money is old Dr. McDonald's real estate, which was supposed to be good for some of the bank's deficit. As this property had been used as collateral, the doctor's brother will now have to bear the heavy responsibility, as Daniel Meyer, another heavy stockholder, last year assigned all his holdings to a nephew in order to escape responsibility.
12.August 16, 1893The HeraldLos Angeles, CA
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Pacific Bank Receivership. SAN FRANCISCO, Aug. 15.-Sheriff McDade has been appointed Receiver for the Pacific bank by Judge Levy. His bond was fixed at $100,000.
13.August 22, 1893The Morning CallSan Francisco, CA
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Dundon's Application. The hearing of the motion of Supervisor Dundon to set aside the adjudication of the Pacific Bank as an insolvent debtor and remove Sheriff McDade from the receivership was continued by Judge Levy yesterday until this morning.
14.August 25, 1893Hot Springs Weekly StarHot Springs, SD
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A RECEIVER has been appointed for the Pacific Bank of San Francisco.
15.September 11, 1893The Seattle Post-IntelligencerSeattle, WA
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# THE PASSING THRONG.
"I am a great believer in this country," said Hon. James S. Clarkson, yesterday, "and all over the country there has been noticed with much pleasure the financial solidity of Seattle during the storm. The banks and people have made a splendid record by standing loyally by each other and thus showing that Seattle is on a solid basis in every business way and is one of the soundest cities, financially and commercially, in the whole nation. This is a fine record, and great credit is due to your people and your banks. The banks of the country ought to be supported strongly and earnestly by every good citizen, both because it is right to do so in a time of panic and because the banks are every-where making a resolute endeavor to protect the country from any further injury. Whatever Eastern banks may have done at the start in opposition to silver, it is to be said that they are now doing all in their power to clear up the situation, remove doubt and bring back prosperity. If the mass of the people shall support them and those who have taken out money to hoard shall return it to the banks, they will make it possible for the banking interests to do all it is possible for them to bring back prosperity."
M. E. Ryan, agent of the Travelers' and Recreation Journal, of San Francisco, is a guest at the Occidental, having come here in the course of a business tour of the Coast. "I found people much depressed in Portland, and high rates of interest are being paid for money there," said he. "The town does not look nearly as well as this, for it is not built up as solidly. Seattle looks to me to be better built than Los Angeles or any other city in California outside of San Francisco. I was over at Virginia City, Nev., last month, and stopped at the National hotel, a big seven-story building which cost $250,000. There was hardly anybody there, and the proprietor told me he would be glad to get $20,000 for the building, but he could not get even $10,000. California is in good shape, for the only failure in San Francisco was that of the Pacific bank, and everybody knew that would go, so it was discounted. The fruit growers are getting the money to gather and pack the crop, so that they will come out all right."
On Wednesday evening, August 30, at the home of Mr. and Mrs. John R. Bigham, in Chatsworth, Ill., Miss M. Catherine Bigham was married to Prof. Howard P. Brode, of Champaign, Ill. Mrs. Brode, as Miss Bigham, will be remembered by a host of friends in Seattle, where, during the past three years, her faithful work in the public schools won for her a place in the front rank of our teachers. She was also an active and thorough worker in the First and Second Presbyterian churches. Prof. Brode, of the chair of zoology of the Illinois state university, though a young man, has already achieved a prominent place in his profession. Immediately after the marriage ceremony, which was performed by Rev. W. W. Coe, formerly pastor of the Second Presbyterian church of Seattle, Mr. and Mrs. Brode left for Mackinac and the lakes of Northern Michigan.
16.October 17, 1893The HeraldLos Angeles, CA
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Pacific Bank Receiver. SAN FRANCISCO, Oct. 16.-H. I. Willey was today appointed receiver of the Pacific bank, as the representative of the state bank commissioners.
17.October 26, 1893Aberdeen HeraldAberdeen, WA
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Sheriff McDade has turned over the Pacific Bank of San Francisco to receiver Willey, who will probe the failure to the bottom.
18.May 12, 1894Deseret Evening NewsSalt Lake City, UT
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Bank Wreckers Indicted. SAN FRANCISCO, May 11.-The grand jury this amernoon presented indictment for grand larceny against Direc. tore H. T. Graves, Charles Montgomery and R. H. McDonald Jr., of the People's Home Bavings bank. The specific charges has not been made public, but 16 18 well understood that it is based upon the abstraction of certain securities from the bank deposited by C.O. Swanberg. The securities, valued at $40,000, disappeared alter the bank had been placed in the hands of a receiver. The assets of the bank were therefore deficient in that amount. An indictment for grand larceny was also found against Frank V. McDonald, late assistant cashier of the Pacific bank. On the eve of its failure McD inald withdrew $14,000 from the Pacific bank and started for New York, He reported to the bank authorities that some robber broke open his trunk and stole the $14,000. McDonald is in Japan. The bail for each person indieted was placed at $50,000. R. H. McDonald Jr. is still in jmil, In default of $100,000 bail on his previous indictment.
19.September 5, 1894The Morning CallSan Francisco, CA
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AN IMPORTANT DECISION. Pacific Bank Officials Held Responsible for Deposits. A decision was rendered by Judge Troutt yesterday in the case of Mathew McGowan against R. H. McDonald and the other members of the board of directors of the defunct Pacific Bank. The plaintiff is the assignee of the firm of McGowan & Butler and George Richardson, who at the time of the failure of the ba nk had on deposit there considerable money. McGowan and Butter bad $32,518 17 to their credit, Thomas Butler $5886 28, and George Richardson $14,055. When the bank failed the firm and Richardson assigned their claims to their deposits to McGowan, and he began suit in the Superior Court to hold the bank directors personally responsible for the amount of the funds on deposit. In the findings and decision Judge Troutt holds that the directors are responsible as follows: Frank V. McDonald liable in the sum of $4966 05; James McDonald, $9114: Sinion Meyer, $2705 89; H. G. Meyer, $1819 65; C. W. Breyfogle, $540; J. J. Baven, $487; C. F. Lott, $545; Paul R. Mabury, $1709, and Uriah Wood, $1111. The sums mentioned are the pro rata liability of the defendants,
20.February 6, 1895The Record-UnionSacramento, CA
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Special to the RECORD-UNION. SAN FRANCISCO, Feb. 5.-In the trial to-day of R. H. McDonald, Jr., of the late Pacific Bank, for perjury, Columbus Waterhouse, a former director, admitted on the witness-stand that on the night before the bank closed its doors, but after the directorate had decided upon its suspension, he (Waterhouse) withdrew $2,000 which he had upon deposit, removing the coin at a late hour, and despite the fact that the bank held much of his paper. Emil Bellerman, formerly accountant of the Pacific Bank, testified that he had made out three deposit tags, each for $100,000, in favor of Columbus Waterhouse, D. S. Dorn and Dr. R. H. McDonald, respectively, but he could not remember whether the defendant or his brother had ordered the tags.
21.February 6, 1895The HeraldLos Angeles, CA
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M'DONALD'S TRIAL. A Witness Tells About Withdrawing Money After Dark. SAN FRANCISCO, Feb. 5.-In the trial today of R. H. McDonald, jr., of the late Pacific bank, for perjury, Columbus Waterhouse, a former director, admitted on the witness stand that on the night before the bank closed its doors, but after the directorate had decided upon its suspension, he (Waterhouse) withdrew $2000 which he had on deposit, removing the coin at & late hour, and despite the fact that the bank held much of his paper. Emil Bellerman, formerly accountant of the Pacific bank, testified that he had made out three deposit tags, each for $100,000, in favor of Columbus Waterhouse, D. S. Dorn and Dr. R. H. McDonald, respectively, but he could not remember whether the defendant or his brother had ordered the tags.
22.February 9, 1895The Salt Lake HeraldSalt Lake City, UT
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# THEY KNEW IT.
Pacific Bank Directors Fully Cognizant of the Rottenness of the Institution.
San Francisco, Cal., Feb. 8.—At the trial of R. H. McDonald, jr., for perjury today, several employees of the defunct Pacific bank testified that McDonald had never appeared before the notary to swear to the Pacific bank's statement, upon which the complaint is based, and to which the notarial seal, attesting McDonald's acknowledgment, was affixed. Ex-Bank Commissioner Dunsmuir swore that during his term of office the bank commissioners were aware of the unsound condition of the Pacific bank and anticipated the suspension of the bank for two years before it was closed.
The commissioners had requested Attorney General Hart to close the bank, but Hart declined to act in the premises.
23.February 15, 1895Cottonwood ReportCottonwood, ID
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M'DONALD'S TRIAL. Admissions on the Witness Stand by a Former Director. SAN FRANCISCO, February 7.-In the trial of R. H. McDonald, jr., of the late Pacific bank, for perjury, Columbus Waterhouse, a former director, admitted on the witness stand that the night before the bank closed its doors, but after the directorate had decided upon its suspension, he (Waterhouse) withdrew $2,000 which he had on deposit, removing the coin at a late hour, despite the fact that the bank held much of his papers Emil Bellerman, formerly an accountant of the bank, testified that he had made out three deposit tags, each for $100,000, in favor of Columbus Waterhouse, D. S. Dorn and Dr. R. H. McDonald, respectively, but he could not remember whether the defendant or his brother had ordered the tags.
24.February 18, 1895Evening StarWashington, DC
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# GENERAL NEWS NOTES.
At a meeting of the Irish National Federation held in New York yesterday resolutions were adopted condemning the action of John E. Redmond and his following of eight in voting against the liberal party in the British parliament as treason to Ireland's cause.
Brad Dunham, superintendent of the Alabama Midland railroad, has been appointed general superintendent of the entire plant system of railroads and steamships, a new position just created. He was connected with the Baltimore and Ohio railroad at one time.
Miss Madge Yorke, a soprano singer on the stage, was shot and almost instantly killed by James P. Gentry, a comedian, in Zeiss' Hotel, Philadelphia, last night. Gentry made his escape.
The eastbound express train on the Baltimore and Ohio railroad struck a trolley car at Pittsburg last night, demolishing the car and killing Miss Anna Cusack, who had just arrived from Germany to see her father, who had not seen her since she was four years old.
The jury in the case of R. H. McDonald, formerly vice president of the Pacific Bank of San Francisco, were discharged on Saturday, being unable to agree. Mr. McDonald was charged with perjury in a statement as to the condition of the bank just before its failure.
John Niblack, son of ex-Congressman Niblack, was called up by strangers at his store at Wheatland, Ind., Friday night. As he opened the store he was shot in the breast. The strangers escaped. Mr. Niblack was badly wounded, but will probably recover.
A passenger train on the Atchison, Topeka and Santa Fe railroad was run into by a Missouri Pacific coal train at Pittsburg, Kan., Saturday night. Several passengers were seriously injured. The passenger train was thrown down an embankment.
Levi Davis, founder and for a long time proprietor of the Davenport (Iowa) Gazette, died Saturday, aged seventy-five years.
The resolution instructing the German government to call an international monetary conference for the rehabilitation of silver passed the reichstag on Saturday with the approval of the government.
The health of the czar's brother, Grand Duke George, who is suffering from pulmonary trouble, is said to be affected by the severe winter of Russia.
President Diaz and cabinet escorted the remains of Minister Gray to the railroad station in Mexico on Saturday, when the journey to Indianapolis was begun.
C. E. Barr of Worcester, Mass., was arrested at Waycross, Ga., on Saturday, charged with forging the name of W. W. Rogers, cashier of the Merchants' National Bank of Savannah, Ga., to a check for $1,260.
The French chamber of deputies Saturday, by a vote of 305 to 205, rejected a motion for the separation of church and state, and also, by a vote of 379 to 111, refused to suppress the budget for the ministry of public worship.
25.March 21, 1895The San Francisco CallSan Francisco, CA
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# DIRECTORS WITHOUT SHARES
WATERHOUSE'S PECULIAR POSITION IN THE PEOPLE'S HOME BANK.
WHY HIS NOTE FOR $10,000 Is Now WORTH NOTHING AT ALL.
The suit of the Pacific Bank and S. G. Murphy to obtain possession of a note for $10,000, made by Columbus Waterhouse, and originally deposited in the Pacific Bank, is the means of throwing more light upon the interesting financial management of the Pine-street institution before it finally went to the wall.
The suit in question was originally commenced by S. G. Murphy to recover from Mr. Waterhouse the amount of the note, which, he alleged, had been assigned to him. Soon after this suit was commenced the Pacific Bank entered the case as an intervenor and claimed the note and its value, the one from Murphy and the other from Waterhouse, claiming that the note had never been assigned to Murphy and that he was not legally entitled to its value. In his answers to Murphy and the Pacific, which were filed yesterday, Waterhouse tells an interesting story as to how the note was made and placed in the Pacific Bank.
In October, 1888, he says, Dick McDonald wanted him to become a director in the People's Home Savings Bank, and to qualify him for the position he issued to Waterhouse several shares of the People's Home Bank stock. For these shares he paid nothing whatever. Soon after that, as an accommodation to the Pacific Bank, he drew up a note for $10,000 in favor of the Pacific Bank, and deposited the same in the bank, without, however, receiving any consideration for the note. To secure this phantom bit of paper, he indorsed over to the bank the fictitious shares of stock
Bank runs are almost always and everywhere a deterioration of bank fundamentals.
But not for you.
You are the measure-zero exception: great fundamentals, solid bank, and yet the Diamond Dybvig fairy spread its rumor. Depositors woke up. Your collateral was not prepositioned. The Clearinghouse had it for you.
Do not pass Go. Do not collect $200. Go directly to jail… or worse.
