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TO. Members of the Board FROM_______Mr. Clayton 1 1 /1 8 /3 8 The attached was received by the Chairman without any accompanying letter and is circulated to you for your information. H E A D O F F IC E San F r a n c isc o . CABLE A D D R E SS C a lif. "B A M E R IC A L " iBt t nk a f A m e r i c a N A T IO N A L SS^'R Tok A S S O C IA T IO N November 10, 1938. Honorable Henry Morgenthau, Jr., Secretary of the Treasury, Treasury Department, Washington, D, C* Dear Secretary Morgenthaut This will acknowledge your letter of November 5 , responding to my telegram s ent to you on November In order that you may clearly undejitand why I sent you the telegram referred to, let me suggest /p«t you review briefly the relevant circumstances which preceded my actic tinder instruction of your Department, Mr. Palmer, National Bank Examiner in Los Angeles, appefesMJsefore our Board of Directors on September 13, 1933» on short notice ar» without previous correspondence, and read a certain telegram which contained unwarranted criticisms and a threat of legal action againswsbCfljters and directors of the Bank. A copy of the tel££ram was mailed to each director personally, and under date of Septomb^gCjtt, the Comptroller* a office addressed a lengthy letter of criticismSwhb threat to our Board of Directors and sent a copy of the letter to^MCh director in an envelope which was marked neither *personal* nor "e^Tidential.* Shortly following these happenings# there appeared in several periodicals news i t a u linking the office of the Secretary of the Treasury with reported disflftplmary measures employed against certain California banks. 1 regret that yoiT'a^Abt take time to read some of the articles to which I refer* Had you reaat&ose articles, you would have been convinced, as any reasonable person would be, that unwarranted criticisms of your Department were divulged to the press instead of being kept in strict confidence, at least until we had an opportunity of being heard. Articles, the source of which Is attributed to your Department, which appeared in certain news services having a broad circulation among business men throughout the country, prompted C O R R K S -(X O )S 7 a -9 « r- * ^ HEAD CABLE ^r-r-,s~r- OFFICE ^ _ F r a n c is c o . ir_ ADDRESS •BAM ERICAL" C alif H nor&ble Henry Morgenthau^iitWt k trf A-ttt CFtCEt November 10, 1938 N A T I O N A L sA V T fJo s A S S O C IA T IO N tome of our most valued clients, such as Woolworthfc, Penney1s, Safeway, Montgomery T*ard, £.nd certain railroads, to make direct and indirect inquiry hb to their se&niig* As a result of the iUblicity fdven to theae setters, a whispering campaign against the Bank got under way, and the rumor was circulated that the Bans would discontinue dividend payments# To meet a possible emergency arisinp in consequence of prevalent gossip, recently the management was obliged to accumulate excessive cash reserves by selling large blocks of rov«rnaent bonds and restricting lending activity, thereby suffering, unneces-arily, a loss in income and prestige* Therefore, when I recently read that po: of October 30, 193$, carrying a blunt reference to under discussion between your office nod our bank that 1 did something personally to put an end to t and printed, that is causinf so much damage to Lon of the "Wilcox* letter controversial matters id it was uigh time lious gossip, verbal In the final analysis, Mr. 8eoreta^y^Ni6^aone must accept responsibility for the damage caused to Bank of America by reason of the unwarranted and damaging, method of attack ^pOiK^he Bank and its management, and the making public of erroneous informati^i^c^loeming the affairs of the Bank which, even had It been correct, should r^v^ been treated as strictly confidential by your Department* Appears in the American Some of the publicityr to wh^^i>r>sf®r w Banker, October 4th issue, page 4, Back^H^nt»# •Washington Banking Trends and Back ■— "*«■ (Wilcox and Aaaociates) I*8u« of Septeaber 4v 1938^ Page 5 ■ • October • 3 • • October 23, » 3 • • 0cteber/~3a, 1933 • 2 • 3 • A O • • ffoMtonOft/ '1938 • 5 Itaa (3) (a) • (i) (r) (e) * (1) (k) • (1) U ) P a g e 1+ • (2) <b) (f) U ) (i) ■ fz} /h} W V Dl • h ) (<•) •The Kiplinger leshin^^bf^by^ter* Issue o£-Qctober • /jM^b^ber • • ^Op'^bar 1# 1933 6, 1938 15# 1938 2 2 , 1938 Fago * * ■ 4 2 2 2 Paragraph 8 Paragraph 5 Laat 6 Paragraph# Last 5 Paragraph* In oase you have may difficulty in securing these artlclss for reference, I shall be glad to send you photostatic copies of them* Digitized for C OFRASER R R E S . - t 2 0 ) 57 4 - 3 7 H E A D O F F IC E Sam F r a n c is c o . C a l i f . CABLE A D D RES* • B A M E K IC A L " Honorable Henry MorgenthJf November 10, 1933. I did not communicate with you in my capacity a a an officer of the Bank, but it was ay sense of responsibility as founder of the institution that impelled me to act and to now write this letter. I have already undertaken, and succeeded in, one tremendous task of rehabilitation, and I do not propose to sit idly by vhile thoughtless and inexperienced pereons take proceedings wyjich tend to destroy this bank, which is a great public service institution and represent® my life’s work. I say it is a public institution because it serves over 2,000,000 depositors whose accounts average less than $675. Bank duty Bank said 1 am not concerned about any damage to myself, personally; the of America is my real concern, and I felt that I had carried out my when I sent you the telegram on November 2. I wanted to protect the from further damage and to give warning tha^N^hose responsible for damage would be held strictly accountable. n my^lace/^lr. Secretary, you I feel sure that had you been in ay 2rotecy<Jhe institution for which you would have acted as I did in order to protec felt responsible. Sincerely, CO «R E S- (2 0 )5 7 10-36
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