Seventeen national banks were placed in the hands of receivers during the year covered by Mr. Hepburn's first and only report to Congress, but only seven of these failures occurred during the nine months of his administration. The remainder occurred during the closing months of his predecessor's term.

The largest of these failures was the California National Bank of San Diego, with a capital of $500,000 and liabilities of nearly a million. This failure was regarded as a great calamity to the local community and considerable effort was made to effect a resumption of the bank. When it was found, however, upon investigation, that the entire capital and surplus of the association had been absorbed by losses, the efforts to resuscitate the bank proved futile, and the former president of the association committed suicide.

The failure of this bank was due to the excessive use of its funds in the promotion of local enterprises of a public character involving large sums of money. The local boom collapsed before any of the enterprises became paying investments, with the usual result that the bank suffered losses and suspension followed.

Criminal violations of law entered largely into all of these failures, and two suicides were the result. False entries, misappropriation of funds, embezzlements, reckless management, forgery, loans to irresponsible relatives of the management, their friends and employees of the banks, promotion of speculative enterprises, in which some of the officers were interested, and, in fact, the whole category of causes which invariably end in failures and disaster, were responsible in bringing about the disruption of all of these associations.