by Paul R. Spitzzeri
On 23 February 1876, the evening Los Angeles Express published the first report to creditors of the failed Temple and Workman bank by its assignees, Edward F. Spence and Daniel Freeman. The report appeared in the Los Angeles Star the following morning. The very first words from the document undoubtedly came as a shock to many:
There were no indexes to the books, and no posting has been done since 1872 [the bank opened in November 1871] . . . we found quite a number of notes due the bank which were almost outlawed.
To assuage creditors, the pair stated that they hired “a very efficient book-keeper” as well as “attorneys for collection” and that any personal property was “in the keeping of responsible parties.”
Freeman and Spence also stated that they’d contacted all debtors “with a measure degree of success . . . some have already paid, others will soon pay, while other make varios excuses.”
The duo then wrote “the task of comprehending the situation is heavy one, and impossible to master in a few days or a few weeks.” It invited input from the creditors’ committee, noting that “sharp criticism is sometimes beneficial.”
When it came to casting blame, the assignees struck a measured tone, observing “at this juncture, it is not for us to palliate or condemn.” Once the books were sorted out “all facts as developed will be at the disposal of the creditors.” They refuted the Herald‘s assertions about “an army of lawyers” being hired by them, but did state that
if immediate suit were instituted against all the debtors of the estate, all the lawyers in Los Angeles county would hardly be sufficient.
Next, Spence and Freeman turned to the basic question “what is going to be done?” and responded “let us look at the facts squarely, fairly and impartially.” They stated that F.P.F. Temple and William Workman possessed “a very large property,” which “is set apart for the benefit of their creditors. What shall be done with it?” The assignees made a proposal.
The proposition is that the property be purchased by the creditors, at an appraisement to be determined by disinterested parties. This proposition would involve the formation of a joint-stock company composed entirely of creditors . . . every claim of one hundred dollars to represent, say, one share of the corporation. The management under this plan would devolve altogether upon the creditors, as the assignees would sell and deed the property to the creditors’ corporation as soon as legally incorporated.
The two men claimed “the benefits of this plan are obvious” because the creditors would become shareholders in an entity “owning some of the most desirable property in Southern California.” They cautioned that, should the plan be adopted, “the creditors must act clamly and wisely, in order that the interests of all may be guarded.”
For those who didn’t want to opt in, it was suggested “a portion, pro rate, of the stock of the corporation might be retained for their benefit.” The assignees concluded their statement by pointing out that there were other strategies, such as “the formation of a syndicate to advance money to pay off the debt” to Baldwin and others, or seeking from Baldwin “a new loan upon favorable terms,” but obviously preferred their proposal.
The same day, the Los Angeles Herald published a detailed list of overdrafts and unpaid drafts of amounts under $1,000, these not being included in the inventory coverage at the beginning of the month. The paper observed that
It is an interesting list and is worth reading if only to show how easy it was for irresponsible parties to draw to a shoestring and get a full hand in that bank. Some of the appended names are good, but a great number of them could not draw a postage stamp in a judiciously conducted bank.
The paper noted that the unpaid drafts were substantial and that “‘unknown’ is a large loser.” Among the “good” names in the overdrafts were local luminaries, such as Mayor Prudent Beaudry; attorney John D. Bicknell; lawyer Horace Bell; Ozro W. Childs; George D. Compton (of the city of that name); Benjamin S. Eaton; attorney Henry T. Hazard (mentioned in early posts in this series); former surveyor and lawyer Henry Hancock; lawyer Frank H. Howard; attorney E.J.C. Kewen; merchant Simon Levy; former mayor John G. Nichols; Andres Pico; Pio Pico’s daughter Catalina Moreno; former mayor Manuel Requena; merchant Joseph Strelitz; Benjamin D. Wilson; and two brothers from the Yorba family. The amounts owned by these ranged considerably.
Yet, there were also many who were directly tied to the bank’s owners, including bank cashier Arthur Bullock (a little over $500); the Express Printing and Publishing Company ($373.17); the Forest Grove Company, of which F.P.F. Temple was president ($622.76); Temple’s friend, William W. Jenkins ($59.37); Temple’s horse-breeding associate S.A. Jackson ($979); Andrew Kittleson, who purchased part of Workman’s share of Rancho La Puente and then could not pay on it so it reverted to Workman ($603.58); the Los Angeles Woolen Mills, another Temple business project ($603.23); F.P.F. Temple, as guardian for “R. Allen” ($915.30); Temple’s wife and Workman’s daughter, Antonia Margarita ($359.51); her brother, Joseph M. Workman ($255.58); and E.J. Weston, an architect who designed buildings for Temple ($350).
As to unpaid drafts, some of those found on the list were the Roman Catholic Bishop Francisco Mora ($250); newspaper publishers Yarnell and Caystile of the Express ($100); merchant Louis Mesmer; Thomas W. Temple, bank cashier and son and grandson of its owners ($200); merchants Dotter and Bradley ($1000); bookseller W.J. Brodrick ($315); bootmaker William Slaney ($600); wine merchants Rivara & Vignolo (over $1100); merchant firm Heinzeman and Company ($300); Thomas McLain ($695); and merchant Theodore Wollweber ($200). As the Herald observed, there were many unpaid drafts maked “Unknown” and totaling nearly $3,000.
In all, the unpaid drafts were said to amount to about $25,000 and the overdrafts were well over $30,000, which were significant sums for a bank in a small town.
More on the Temple and Workman bank assignment is coming, so check back soon.