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FAILURE OF THE BANK

Bank Examiner Maxwell Closes Its Doors Saturday.

Bank Officials Kill Themselves

All Vancouver Mourns the Dead. The Condition of the Bank Thought not to be Bad. Examiner Maxwell Refuses to make Statement of Condition at this Time.

All Vancouver was startled Saturday morning by the news of the failure of the First National Bank, and the disappearance of President Brown, and Cashier Canby. A few had heard of the failure of the bank the previous night, but the public was not made known of the fact till nine o’clock, Saturday morning, when Examiner J.W. Maxwell, who had been making an examination of the bank the previous day, hung out a notice stating that the bank had closed its doors and was in the hands of the Controller of the Currency.

Excitement and consternation reigned supreme, and during all that day and for several days following, business was practically suspended. The streets have been crowded with excited men, women and children, all discussing the sad occurrence and estimating what their individual losses will be. Nearly everybody with any means has his money tied up in the bank, and even if no loss is sustained, the inconvenience in transacting business is great.

The depositors of the bank number about 1000 people, and their deposits amount to about $230,000.

DEPOSITORS HOLD A MEETING

As nothing could be learned of the condition of the bank Saturday, the depositors called a meeting at the Standard Theatre, at two o’clock, to discuss the situation and see if some action could be not taken for the protection of the depositors. The meeting was attended by about 300 depositors; C.D. Bowles was chosen chairman of the meting and W.P. Crawford, secretary. Mr. Bowles addressed the meeting, stating that the object of calling the meeting was to petition the controller of the currency that in case it became necessary to appoint a receiver for the bank, the naming of such receiver be left to the depositors. W.W. McCredie then made a motion embodying this petition, which after considerable wrangling as to the correct form of presenting said request, was unanimously passed. The meeting was adjourned.

EXAMINER MAXWELL’S STORY

Examiner Maxwell, who arrived in this city early Friday morning, for the purpose of inspecting the First National Bank, told the following story to United States District Attorney Gay, who has given it to the public:

Mr. Maxwell said: “I arrived Friday morning and worked on the books of the bank nearly all day with both Mr. Brown and Mr. Canby in the bank. During the day I became satisfied that the condition of the bank was not as it ought to be, and called for private books and papers. This convinced Mr. Canby that I suspected all was not right, and that in a few minutes the condition of the bank would be laid bare. I was working at a high bookkeeper’s desk in the rear room of the bank with my back toward Mr. Canby, when he called out in a nervous tone:

“Oh, Maxwell!”

“Well, what is it?” asked the inspector, turning around.

“I may as well own up, old man,” replied Mr. Canby. “You’ve caught us. You’ve got onto this thing. No other man ever did, but you have learned it all. There’s nothing left but for me to blow my brains out.”

Saying this, Mr. Canby picked up a revolver which was on another table in the room, and dallied with it a moment. Maxwell made a leap for him to take the gun away, but Mr. Canby ran out of the room into a passageway and held the door fast after him. Maxwell hurried into the main room of the bank where Mr. Brown was, and exclaimed:

“For God’s sake, go in there; that man is going to kill himself.”

Brown was perfectly self-possessed. Not a muscle flinched as Maxwell made the astounding statement. He walked quickly back into the rear room and out into the passageway, where he and Mr. Canby remained alone for several moments. Every instant the examiner expected to hear the pistol shot that would send Mr. Canby into eternity, but it did not come. After a few moments’ waiting the two bank officers came back into the rear room where Maxwell was. Mr. Canby still held the revolver.

“It isn’t my fault that I’m not dead,” he remarked to Maxwell. “This gun wouldn’t go off.”

“Let me look at it,” requested Maxwell, and Canby passed it over. Mr. Maxwell promptly put it in his pocket.

“Mr. Brown,” queried Maxwell, “are you a party to the condition of this bank? Have you been in this thing, too?”

“Yes,” replied Brown, coolly. “I’m equally guilty, I have known all about it all the time.”

The three then discussed the condition of the bank for some moments. This part of the conversation Mr. Maxwell will not divulge, but after talking to Mr. Brown and Mr. Canby for a few moments he announced his intention to close the bank, and to take possession of what cash was on hand. The three went out into the main room, where Mr. Maxwell counted the cash. Realizing that he was in the presence of two desperate men, who were looking death in the face without a tremor, Mr. Maxwell would not go into the vault, but instead asked Mr. Brown to put the cash away, which later they willingly did.

When everything was in order Mr. Canby again remarked that there was nothing for him and Mr. Brown to do but kill themselves. Mr. Brown said nothing, but by his silence seemed to acquiesce in his friend’s morbid view of the situation. He reached down and took anther revolver off a shelf under the counter and put it in his pocket. Then he and Mr. Canby left, and were not seen afterwards till their bodies were found Sunday morning.

ACTION OF THE AUTHORITIES

After the officials of the bank left, Mr. Maxwell placed a guard at the ferry to see that they did not leave town that way, and then wired for the United States District Attorney, who arrived Saturday night. In the meantime Examiner Maxwell reported the case to Prosecuting Attorney Sparks, but Mr. Sparks took no action as the case did not come under his jurisdiction.

District Attorney Gay, upon his arrival after holding a consultation with Maxwell, drew up a complaint, charging President Brown and Cashier Canby with making a false entry in their books. The complaint was made to Judge A. L. Miller, of the Superior Court, who issued a warrant for the arrest of the two men. This warrant was placed in the hands of Sheriff Marsh, who immediately commenced a search for the missing officials. The sheriff was instructed to search the houses of the officials and about 10:30 Saturday night performed that disagreeable duty. S.W. Brown’s house was also searched.

THE ROUTE OF THE OFFICIALS

On leaving the bank Friday evening between five and six o’clock, President Brown and Chaseire Canby proceeded directly to the scene of their last act without first going home. They went North up B street, Mr. Brown leading his wheel and Mr. Canby carrying an umbrella. After proceeding North up B Street as far as 13th street, they were seen by Miss Julia Hidden to turn West as far as C Street, and then turn North. Mr. Dillon saw them pass along past the Brant place, and C. Newland and wife, who live in a house near the grove just East from the Columbia school, saw them enter said grove.

With this information, Chatfield Knight and Rev. C.O. Johnson made a search of the grove Saturday evening, finding Mr. Brown’s bicycle and 100 feet or so directly north from the place of finding the bicycle, found Mr. Canby’s umbrella. Further search was made of the woods but nothing more was found. Mr. Knight and Mr. Johnson then returned with the bicycle and umbrella, and reported what they had found to the families of the missing men. Both families had believed from the first that the missing men would be found dead and these discoveries only served to make them feel more certain.

THE SEARCH FOR THE BODIES

Working on this clue a search party was organized Saturday night to start out at seven o’clock Sunday morning to make a search for the bodies. The party consisting of A.C. Chumasero, Miles Smith, Milton Evans, M.L. Coovert, J.A. Munday, George DuBois, Chas. McCarty, O.H. Pebbles, Harry Burgy, O.H. Smith, Chas. Reynolds, M.R. Sparks, Foster Hidden and E.L. Brown, under the lead of Chatfield Knight, met on the corner of 13th and B streets, and promptly at seven o’clock proceeded to the grove where the bicycle and umbrella were found, and the grove was given a systematic search but with no results. The party was then in doubt which way to proceed but Mr. Knight advised going North to the woods adjoining Clough’s orchard as that is the direction the missing men had taken, as shown by the position the articles belonging to them were found. (It is now thought the bicycle and umbrella were left where they were to show a searching party which direction to take.) The party finally decided to take this course, and proceeded directly North to the railroad which they crossed about midway between Kauffman Avenue and Main street. Proceeding thence north across the prune orchards and over the fence to the bushes the opposite side, James Munday, one of the party came upon the bodies in a cluster of young firs, not more than 50 feet from the fence, and called to the others of the party, who were only a short distance away. The bodies lay upon their backs with their feet almost together. Mr. Brown held the pistol, there being only one for both shots, showing that Mr. Canby had shot himself first and them Mr. Brown had taken the pistol and ended his troubles.

Part of the party then went back to the town and reported to Coroner Burt, who secured rigs and proceeded to the scene of the horrible deed. The bodies were placed in coffins and taken to the morgue, where an inquest was held. A jury was hurriedly impanneled, who promptly found that the men had met death by their own hands. At the inquest among the personal effects of the deceased were found short messages to the families of the two men stating that what they were about to do was for the best as they did not consider they were of any longer use to their families. Both carried life insurance but up to this time the amount each carried has not be ascertained.

After dressing the bodies, they were taken to their respective homes from where the funerals were held. Mr. Brown’s funeral was held Monday at 2 o’clock and Mr. Canby’s Tuesday at 11:30 o’clock. Mr. Brown’s remains were interred in the city cemetery and Mr. Canby’s were taken to Portland for burial.

CAUSE OF THE FAILURE

Examiner Maxwell has refused to make a statement of the bank’s condition and the actions of the officials that would cause them to adopt such desperate measures. He says he has been positively forbidden to do so by the department. In a general way, however, the reasons for closing the bank are well understood.

Briefly stated, the bank during the boom that visited Vancouver years ago, loaned too much money on security that became almost worthless when the panic came in 1893. For years the bank has been struggling to get out from under the heavy load, and bank examiners who have gone through the books heretofore have passed the securities of the bank. Mr. Maxwell, however, after making a full examination of the assets, together with the cash on hand, found it to be insolvent. The last statement of the bank, issued in February, showed that it carried about $230,000 deposits, and as a result of its failure nearly everybody in Vancouver of any financial standing has lost, or apparently lost, more or less money.

Several years ago the bank loaned $20,000 to the Michigan Lumber Company, and was forced to take this property. This loan was practically a dead loss. The mills are not in operation, and absolutely nothing has been realized on the security. It has loaned $20,000 on a quarter block in the heart of Vancouver, and was forced to take the property, which yielded practically nothing. In the same manner $12,- was sunk in the Ross mills.

About a year ago the bank reduced its capital stock from $100,000 to $50,000. At that time about one-half of the so-called bad assets, including the Michigan Lumber Company property, was “charged-off” – that is but one-half of it has been carried as an asset since that time. The directors of the bank are F.N. Marshall, L.M. Hidden, C.H. Funk, and Mesars. Brown and Canby.

The heaviest stockholder is Colonel Stephen P. Joslyn, of the regular Army, a member of General Shafter’s staff. Colonel Joslyn is stationed at San Francisco. His post was Vancouver when the bank was organized in 1883, and ever since that time he has been the heaviest stockholder. It was his influence which made Mr. Canby cashier.

The bank weathered the panic of 1893 with much difficulty. It is said that at one time it carried nearly $300,000 in deposits with only $5000 in actual cash in the safe. It was in somewhat better shape when Mr. Maxwell closed it. In addition to what cash it had on hand, the amount of which cannot be ascertained, it carried reserve deposits in two Portland banks, in the Hide and Leather Bank, of New York City, in a Chicago bank, and in a bank in San Francisco. Its February statement showed that it had $77,412.83 in reserve. How much of that has been withdrawn since it is impossible to state, but it is learned on good authority that some $40,000 still remains in the banks of Portland. The bank has not paid a dividend since 1895.

The February statement in detail follows:

RESOURCES

Loans and discounts
Overdrafts, secured and unsecured
U.S. Bonds to secure circulation
Premiums on U.S. Bonds
Stock, securities, etc
Banking-house, furniture, and fixtures
Other real estate owned
Due from National Banks (not Reserve Agents)
Due from State Banks and Bankers
Due from approved reserve agents
Internal-Revenue stamps
Checks and other cash items
Notes of other National Banks
Fractional paper currency, nickels, and cents
Lawful money reserve in bank, vis: Speele
Legal tender notesRedemption fund with U.S. Treasurer
(5 percent of circulation)
Total

$124,400.46
$3,034.19
$12,500.00
$400.00
$4,729.90
$7,000.00
$26,500.00
$1,674.24
$16,857.98
$77,412.88
$545.00
$3,652.28
$1,340.00
$174.66
$19,746.80
$2,755.00
————–
$22,501.80$625.00
$303,348.29


LIABILITIES
Capital stock paid in
Surplus fund
Undivided profits, less expenses and taxes paid
Nation Bank notes outstanding
Individual deposits subject to check
Demand certificates of deposit
Time certificates of deposit
Cashier’s checks outstanding Total
$50,000.00
$4,000.00
$5,874.70
$12,500.00
$179,687.62
$48,289.94
$7,555.88
$440.15
————–
$303,348.29

The present condition of the bank will probably not be known for a week. A full statement is being prepared by Examiner Maxwell, and this must reach Washington before any statement can be given the public. It is now thought by those the best informed that the losses to the depositors will be slight if any.

A committee of prominent citizens visited Portland Sunday for the purpose of interviewing Levi Ankney, the well known millionaire Walla Walla banker, who is visiting there, and asked him to take up the assets of the bank and place it on its feet again. Mr. Ankeny was unable to give the committee a positive answer owing to the fact that the bank’s condition has not been made public. Mr. Ankeny is willing to put some money into a new bank or assist in reorganizing the presen one it is found possible. The stock-holders of the closed bank held a meeting Monday night and decided to reorganize, asking Levi Ankney to accept the presidency. It is stated on good authority that the bank is in better condition financially than it has been for a number of years, and that in a very short time, it will be able to pay off the depositors in full. Very few are now worrying over the money deposited in the bank.

WHAT ONE DIRECTOR THINKS

L.M. Hidden, one of the directors, and a large depositor, said: “I do not believe that either Mr. Brown or Mr. Canby actually ever stole one dollar from the bank. I believe it will be found when this investigation is over that whatever shortages are discovered occurred at different times during the past 10 years, commencing with the boom times of 1889 and 1890. These amounts, which, in my opinion, represent private investments, or something of that nature, made during those times by one or both of the officers implicated, were carried along on the books in one item, representing, it may be, cash in a reserve bank or something of that kind. I think the entry dated January 19, 1901, discovered by the examiner was simply the last entry made of this item. I believe the bank to be in comparatively good shape, and that the depositors will receive 100 cents on every dollar deposited. I was present when the February statement, the last one issued, and which was published in The Oregonian, was made up. I helped count the money, examined the notes and I do not see how that statement can fail to be correct.”

Other directors soon take the same view of the situation as Mr. Hidden. There are, on the other hand, others, of course, who believe affairs are in even worse condition than yet reported and are prepared for the worst that can happen.

OBITUARY OF PRESIDENT BROWN

Charles Brown was born in Knoxville, Illinois, July 15, 1850. He came to Vancouver in 1861 with his father, S.W. Brown, who was appointed by Abraham Lincoln, first receiver of the United States Land Office of this place. The family came by way of the Isthmus and San Francisco, and took up their residence in this city the same year. The subject of this sketch was then a boy of eleven years. He attended school at this place, completed the course of study then provided, which was very meagre. The rest of his education he got by hard study without instructors. After finishing his school days, he went to San Francisco, where he worked at the printing trade for several years, after which he returned to this place where he has since lived. In 1874, he was united in marriage to Rebecca Slocum. The ceremony took place at the family residence, where they have since resided, and where three daughters have been born to them, all of whom are living.

The life of Mr. Brown has been an active and progressive one. He has been prominently identified with the growth and prosperity of the city for years, has represented the city’s official head and has been a member of the city council. In years past, he took an active interest in politics and was elected to the office of county auditor four successive terms. In 1891 he was elected president of the First National Bank, with which institution he has since been connected.

Deceased was a man of high culture and fine literary taste, and had obtained a good education. He was naturally possessed of a genial and social disposition and of an exceedingly generous impulse. He was inclined to look on the dark side of life and in recent years would often times give himself over to morose and melancholy thought and forebodings. He possessed the confidence and esteem of his fellow citizens to a marked degree, having for years been entrusted to the management of large properties by his business acquaintances and friends without the thought of a bond or security, and with implicit confidence in his honesty. These people refuse to believe him or Mr. Canby guilty of a dishonest act till it is absolutely proven and the matter searched to the bottom. Notwithstanding the dark circumstances which attend his untimely death, he will long be remembered by a multitude of friends, as the kind father, the loving husband, the obliging neighbor and respected citizen.

The funeral was held from the family residence at two o’clock Monday, and was largely attended, many friends from Portland taking this opportunity to pay their last tribute. The services, conducted by Rev. Wm. Elliot, of Salem, a friend of the deceased, were short and simple. The following friends of the deceased acted as pall bearers: George H. Stevenson, L. B. Clough, A. J. Cook, E. M. Rande, A. C. Chumasero and Chatfield Knight. With the exception of S. W. Brown, father of the deceased, and Mrs. E. L. Carpenter, oldest daughter, who are both sick, all the immediate family followed the remains to their last resting place.

OBITUARY OF CASHIER CANBY

Edmund L. Canby was born in Wilmington, Delaware, May 8, 1848, a son of Edmond and Mary (Price) Canby, natives of Delaware and Maryland respectively. They were descended from Quaker ancestors, who were among the early colonial settlers of New England. Edmund L., the youngest of ten children, completed his education in his native state in 1864, after which he was employed as clerk in the lumbering business for several years. He was next employed in a flour mill and in 1877 became assistant to his brother, Majory James P. Canby, Paymaster in the United States Army, after which he made his home at Portland, Oregon, until July, 1883. Mr. Canby was then elected cashier of the First National Bank of this place, which was incorporated in July, 1883, with a capital stock of $50,000, and the following officers: President, Louis Sohns; Vice-President, David Wall; Cashier, E.L. Canby. He has since been connected with the institution as cashier, covering a period of eighteen years.

Mr. Canby has been closely identified with the best interests of Vancouver and Clark county since his advent into business circles, and many of the important enterprises have had his support, financially and otherwise.

In 1884 deceased was united in marriage to Miss Francis Burnside, a native of Oregon and eldest daughter of D.W. Burnside, and old and respected Oregon pioneer, who came to the Pacific coast via the Panama route in 1850. Five children have been born to them, two boys and three girls, the oldest of which is 16 years. Four children survive him, two boys and two girls.

Mr. Canby was a man of good culture and high social standing. He was social and genial and was what can be termed a home man, spending most all his time outside of banking hours with his wife and family.

The funeral held from the family residence at 11:30 o’clock, Tuesday, was largely attended. The services, conducted by Rev. Birckhead, of St. Lukes Episcopal church, were short but impressive. The remains were interred in the Riverview cemetery in Portland. A special car was chartered for the family and immediate friends of the family who attended from here. The funeral procession formed on the corner of First and Jefferson streets at 2:30 p.m. E.M. Rands, A.C. Chumasero, L. B. Clough, Geo. H. Stevenson, A. J. Cook, W. H. Arnold, F. M. Marshall and C. G. Shaw, all intimate friends of the deceased, acted as pall bearers.

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