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REPORT.

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ASSEMBLY CHAMBER, SACRAMENTO, February 15, 1887.

MR. SPEAKER: Your Committee on Savings Banks, to which was referred Assembly Bill No. 402-"An Act for the government of savings banks, and for the protection of depositors in the same "-has given the subject careful consideration, and begs leave herewith to present a substitute for said Assembly Bill No. 402, and to recommend that the substitute do pass. The committee desires to call your attention to facts set forth in the last report of the Bank Commissioners of date August 10, 1886, covering the subject of savings banks in this State, and showing, by the statements of the banks themselves, that in the interest of depositors, and to restrain the greed of those who bid for the care of the sweat savings of the frugal poor, the State cannot take action too soon.

Without drawing invidious distinctions, it may be said that in one case, and that one the second largest savings bank in the State, the Board of Directors confessed, in its report, that while it pays only three and three quarters per cent dividend to its depositors, it pays its stockholders thirteen and one third per cent; that is to say-the toiler's hard-earned one thousand dollars receives thirty-seven and fifty one hundredths dollars, and the one thousand dollars of the banker is allotted one hundred and thirty-three and thirty-three one hundredths dollars.

Another large savings bank pays depositors four per cent, and its stockholders twelve per cent, and so on down a scale towards honesty until the demands of the banker are met by an advance of only about one hundred per cent over payments to depositors. With one solitary exception, so far as this committee has been able to determine, the banks systematically take large sums from the earnings of deposits, and place them in funds called "Reserve and Profit and Loss," and "Contingent," and "Other Liabilities," in this way alienating such moneys from the real owners, and placing them where, "if they will not do the most good," at least where they can be most easily manipulated. In one flagrant case this fund, wrongfully taken from the poor, has reached the enormous sum of one million and a half ($1,500,000) of dollars.

Such unjust financiering should be prohibited by law. The natural outgrowth of a first step in "tithing" the earnings of deposits-in robbing depositors of ten per cent of their earnings-may be seen in a practice of extravagant, conscienceless fees to officers, its President, Secretary, and Board of Directors, and its attorney made a millionaire in a decade; its "uncles, and cousins, and aunts" pensioned for life, and sinecure "expertships" created and made" gilt-edged " for the benefit of decayed friends. Why not, when all these things can be done with the money of the poor? The committee is in the possession of much reliable and specific data, which it will bring forward for your consideration whenever it shall be your pleasure to grant it a hearing.

Your committee is of the opinion that the Bank Commissioners should make a searching investigation, bring these practices to the light of day, and under the provisions of the bill herewith recommended for passage, to apply a remedy.

LABLANC, Chairman.

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SPECIAL COMMITTEE OF INVESTIGATION.

The Special Committee of Investigation appointed by the Assembly to inquire into the charges presented by Hon. D. S. Terry against Chief Justice R. F. Morrison and Associate Justice J. R. Sharpstein, of the Supreme Court, met at the Capitol, in the Supreme Court chamber, at three P. M. of August 6, 1886, for the purpose of taking testimony with reference thereto. Present, Chairman Morris, Gregory, McGlashan, Davis, and Ashe.

The Clerk read the complaint of Judge Terry, the resolutions of the Assembly with reference thereto, and the return of the Sergeant-at-Arms on the citation served upon the two Justices.

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I hereby certify that I served the resolution, adopted by the Assembly July 29, 1886, together with the complaint presented in said Assembly on said day; also the resolution adopted by the Assembly on the thirtieth day of July, 1886, together with a notification, on the thirty-first day of July, A. D. 1886, on Robert F. Morrison, at his residence in the City and County of San Francisco, State of California, by delivering personally to said Robert F. Morrison a certified copy of each of said resolutions and said complaint, and a notification signed by the Speaker and Clerk of the Assembly, and leaving the same with him. That true copies of all of said papers so served are hereto attached and made part of this return. JEROME PORTER,

Sergeant-at-Arms of Assembly, twenty-sixth (extra) session, California Legislature. Dated August 2, 1886.

ASSEMBLY CHAMBER, SACRAMENTO, July 30, 1886.

Hon, R. F. MORRISON, Chief Justice of the Supreme Court of the State of California: You are hereby notified to appear before a committee on investigation, on Friday, August 6, 1886, at three o'clock P. M., in the Supreme Court-room at Sacramento, California, in pursuance of a resolution adopted by the Assembly this thirtieth day of July, A. D. 1886, at which time the committee will proceed to the investigation of the complaint presented to said Assembly against yourself, a copy of which is herewith served.

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I hereby certify that a resolution was adopted by the Assembly, on the thirtieth day of July, 1886, of which the following is a copy, viz.:

Resolved, That the special committee appointed by the Assembly of the State of California, on July 29, 1886, to investigate the charges contained in the complaint filed against Hon. R. F. Morrison, Chief Justice, and Hon. John R. Sharpstein, Justice of the Supreme Court of this State, be and they are hereby empowered to send for all necessary persons and papers, and to summon witnesses, administer oaths, and to perform all other acts necessary to a full investigation of the charges in said complaint contained; to appoint a clerk at the usual compensation allowed committee clerks, and a stenographer at the compensation allowed Court reporters by law, who shall reduce all testimony to writing; to have said testimony printed daily and laid upon the desks of members; that the Sergeant-at-Arms be and he is hereby instructed to serve copies of the complaint and resolu

By ED. J. SMITH, Assistant Clerk.

tions herein upon the said Hon. R. F. Morrison and Hon. John R. Sharpstein, and that a notice be served at the same time citing the said Hon. R. F. Morrison and Hon. John R. Sharpstein to appear before said committee at the Supreme Court-room, in the City and County of Sacramento, State of California, on Friday, August 6, A. D. 1886, at three o'clock P. M. of said day. FRANK D. RYAN, Chief Clerk. SACRAMENTO, July 29, 1886. To the honorable Senate and Assembly of the State of California: David S. Terry, a citizen of the State of California, residing in San Joaquin County, complains of R. F. Morrison, Chief Justice of the Supreme Court of said State, and alleges: That since his election to the office of Justice of said Court, the said R. F. Morrison has, by reason of disease, become, now is, and for all time hereafter will be totally incompetent, by reason of physical and mental infirmity, to discharge the duties of his said office. Wherefore, your petitioner prays that said R. F. Morrison be moved from his said office, as provided by Section 10, of Article VI, of the Constitution of the State of California. [Signed:] D. S. TERRY.

ASSEMBLY CHAMBER, SACRAMENTO, July 30, 1886. JEROME PORTER, Esq., Sergeant-at-Arms of Assembly: I hereby certify that a resolution was adopted by the Assembly, on the twenty-ninth day of July, 1886, of which the following is a copy, viz.:

WHEREAS, It has been charged by the complaint of David S. Terry, a citizen of this State, that Robert F. Morrison, Chief Justice of the Supreme Court, and John R. Sharpstein, a Justice, have, since their election to that office, become permanently incompetent, by reason of both physical and mental infirmity, to discharge the duties of their office; therefore,

Resolved, That a committee of seven be appointed by the Speaker to investigate said charges, and that a copy thereof be furnished to said R. F. Morrison, Chief Justice of the Supreme Court of California, and John R. Sharpstein, Justice of said Court.

And in pursuance thereof, the Speaker appointed as the committee, Messrs. Morris, McJunkin, Gregory, McGlashan, Ashe, Henry, and Davis. FRANK D. RYAN, Chief Clerk.

By ED. J. SMITH, Assistant Clerk.

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I hereby certify that I served the resolution adopted by the Assembly July 29, 1886, together with the complaint presented in said Assembly on said day, also the resolution adopted by the Assembly on the thirtieth day of July, 1886, together with a notification, on the thirty-first day of July, A. D. 1886, on John R. Sharpstein, at his residence in the City and County of San Francisco, State of California, by delivering personally to said John R. Sharpstein a certified copy of each of said resolutions and said complaint, and a notification signed by the Speaker and Clerk of the Assembly, and leaving the same with him. That true copies of all of said papers so served are hereto attached and made part of this return.

JEROME PORTER,

Sergeant-at-Arms of Assembly, twenty-sixth (extra) session California Legislature. Dated August 2, 1886.

ASSEMBLY CHAMBER, SACRAMENTO, July 30, 1886. Hon. J. R. SHARPSTEIN, Justice of the Supreme Court of the State of California: You are hereby notified to appear before a committee on investigation on Friday, August 6, 1886, at three o'clock P. M., in the Supreme Court-room at Sacramento, California, in pursuance of a resolution adopted by the Assembly this thirtieth day of July, 1886, at which time the committee will proceed to the investigation of the complaint presented to said Assembly against yourself, a copy of which is herewith served.

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ASSEMBLY CHAMBER, SACRAMENTO, July 30, 1886. JEROME PORTER, ESQ., Sergeant-at-Arms of Assembly:

I hereby certify that a resolution was adopted by the Assembly on the thirtieth day of July, 1886, of which the following is a copy, viz.:

Resolved, That the special committee appointed by the Assembly of the State of California on July 29, 1886, to investigate the charges contained in the complaint filed against Hon. R. F. Morrison, Chief Justice, and Hon. John R. Sharpstein, Justice of the Supreme Court of this State, be and they are hereby empowered to send for all necessary persons and papers, and to summon witnesses, administer oaths, and to perform all other acts necessary to a full investigation of the charges in said complaint contained; to appoint a clerk at the usual compensation allowed committee clerks, and a stenographer at the compensation allowed Court reporters by law, who shall reduce all testimony to writing; to have said testimony printed daily and laid upon the desks of members; that the Sergeantat-Arms be and he is hereby instructed to serve copies of the complaint and resolutions herein upon the said Hon. R. F. Morrison and Hon. John R. Sharpstein, and that a notice be served at the same time citing the said Hon. R. F. Morrison and Hon. John R. Sharpstein to appear before said committee at the Supreme Court-room, in the City and County of Sacramento, State of California, on Friday, August 6, A. D. 1886, at three o'clock P. M. of said day. FRANK D. RYAN,

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By ED. J. SMITH, Assistant Clerk.

Chief Clerk.

SACRAMENTO, July 29, 1886.

To the honorable Senate and Assembly of the State of California: David S. Terry, a citizen of the State of California, residing in San Joaquin County, complains of John R. Sharpstein, Justice of the Supreme Court of said State, and alleges: That since his election to the office of Justice of said Court, the said John R. Sharpstein has, by reason of disease, become, now is, and for all time hereafter will be, totally incompetent, by reason of physical and mental infirmity, to discharge the duties of his said office.

Wherefore your petitioner prays that said John R. Sharpstein be removed from his said office, as provided by Section 10, Article VI, of the Constitution of the State of California. D. S. TERRY. [Signed:] ASSEMBLY CHAMBER, SACRAMENTO, July 30, 1886.

JEROME PORTER, ESQ., Sergeant-at-Arms of Assembly:

I hereby certify that a resolution was adopted by the Assembly on the twenty-ninth day of July, 1886, of which the following is a copy, viz.:

WHEREAS, It has been charged by the complaint of David S. Terry, a citizen of this State, that Robert F. Morrison, Chief Justice of the Supreme Court, and John R. Sharpstein, a Justice, have, since their election to that office, become permanently incompetent, by reason of both physical and mental infirmity, to discharge the duties of their office; therefore,

Resolved, That a committee of seven be appointed by the Speaker to investigate said charges, and that a copy thereof be furnished to said R. F. Morrison, Chief Justice of the Supreme Court of California, and John R. Sharpstein, Justice of said Court.

And in pursuance thereof the Speaker appointed as the committee, Messrs. Morris, McJunkin, Gregory, McGlashan, Ashe, Henry, and Davis. FRANK D. RYAN,

By ED. J. SMITH, Assistant Clerk.

Also, the following letter from the Justices:

Chief Clerk.

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STATE OF CALIFORNIA, JUDICIAL DEPARTMENT, SUPREME COURT, August 5, 1886.

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To the Hon. WILLIAM H. PARKS, Speaker of the Assembly of the State of California: SIR: We are in receipt of a notice, dated July 30, 1886, requesting our attendance tomorrow before a committee of the Assembly, with a view to an investigation touching our capacity to discharge the duties devolved upon us as members of the Supreme Court. We are also in receipt of copies of certain charges made against us, and also of the resolutions of the Assembly appointing the committee, and empowering it to send for persons and papers.

While entertaining the highest respect for the Assembly of the State, we feel that we would be wanting in the proper discharge of the high trust imposed upon us by the people as members of the judicial department of the State, should we fail carefully to guard the independence of the coördinate branch of the Government, committed, in part, to our charge.

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The harmonious and efficient operation of our political system depends upon its checks and balances; and it must be admitted that the independence of each of the three great departments of government is essential to the permanency of our free institutions.

Recognizing fully the power of the two Houses of the Legislature to remove Judges of the Supreme Court by concurrent resolution, as provided in Art. VI, Sec. 10, of the Constitution of this State, such action can only be taken for an adequate cause, and after an opportunity afforded such Judges of being heard in their defense before the two Houses in whom this great power is vested.

Members of the Judicial Department of the Government can not, under the Constitution, be tried by a body of lesser dignity in the Government than the Houses of the Legislature; nor can such power be delegated to a committee, or less number than an organized House.

We cannot, therefore, construe the resolution of the Assembly referred to as other than one for the purpose of ascertaining by preliminary investigation whether the Judges against whom such charges have been made shall be put upon their trial.

Should we be cited by the honorable Assembly to answer any charges arising under the Constitution and laws we will promptly appear and make our defense, but must, for the reasons stated, respectfully decline to recognize any committee as vested with jurisdiction to hear and determine any accusation against us.

With full confidence that you and the honorable body over which you preside will read in this communication, not an attempt to obstruct the legitimate exercise of the power of the Legislature, but rather a desire to protect the independence of the judiciary, and with the conviction that as the Courts have never failed to maintain legislators in the full and untrammeled discharge of their legitimate functions, so you and they will not, upon reflection, fail to approve in us a determination to maintain the rights and immunities of that branch of the Government of which we are a part, and upon whose absolute freedom of action every citizen of the State, from the highest to the humblest, has a deep and abiding interest.

We have the honor to remain,

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MR. TERRY-What position do you occupy? Answer, Deputy Clerk of the Supreme Court.

Q. Have you the minutes of the Supreme Court in bank from the tenth day of July, 1885, to the present time? A. I have.

Q. Turn to them. How many opinions have been filed by the Supreme Court during that time? A. That would necessitate a good deal of figuring.___ I would have to go through the whole book to ascertain. Q. Have you ever made an estimate? A. I never have. Q. Just count the cases. A. There are over two hundred pages. Some of the cases are with reference to writs of habeas corpus. Do you want those?

Q. I want the cases where opinions have been filed.

MR. MCGLASHAN-I would suggest, as there may be a line of questions asked this witness which will require a great deal of time to answer correctly, that Judge Terry ask those questions, and the witness be allowed time to make the necessary investigation to enable him to answer, and that meanwhile we proceed with other testimony.

MR. TERRY-I want to find out the number of cases which were decided in bank within the time specified, and then the number of opinions written

by Chief Justice Morrison and Justice Sharpstein during the same time, with the numbers of the cases.

WITNESS-I would suggest that that could be obtained from the Secretary of the Supreme Court a great deal better than from the office of the Clerk here.

THE CHAIRMAN-Where is the office of the Secretary? A. In San Francisco. There is where all the opinions are filed.

Q. Do you not keep a record of the opinions filed? A. No special record farther than the minutes show.

Q. But the minutes do show also? A. Yes; but in order to ascertain the opinions in department and bank I would have to go through the minutes, while the Secretary of the Supreme Court could at once give the exact number of opinions filed and by whom written.

MR. TERRY—I do not know of any other way to ascertain it now than by an examination of the minutes.

THE CHAIRMAN-Proceed, then.

MR. MCGLASHAN-Is there any objection, Judge Terry, to your submitting the questions you have indicated in writing, and allowing the Clerk time to examine the minutes and prepare his answers?`

MR. TERRY-The questions I desire to ask are:

1. How many cases were decided in bank during the period specified? 2. How many cases were decided in department during the same time? 3. How many opinions were written by these two Justices?

MR. MCGLASHAN-While the Clerk is ascertaining the facts in answer to those questions, is there any objection to examining some other witness? MR. TERRY-The first step in the investigation is to ascertain what these two Justices have done?

THE CHAIRMAN-Suppose, Judge Terry, you write out the questions you desire the witness to answer, and let him take time to ascertain the facts. MR. TERRY-Very well. These are the questions I wish to put to the witness:

1. What number of opinions have been filed by the Supreme Court of California from the tenth day of July, 1885, to the first day of August, 1886? 2. What number of opinions were written during that period by Morrison, C. J., and what were the titles and numbers of the cases in which he wrote opinions?

3. What number of opinions were written during that period by Sharpstein, J., and what were the titles and numbers of the cases in which he wrote opinions?

WITNESS-To answer all those questions I would require two or three assistants. I would suggest again that the information desired can be obtained more accurately by applying to the Secretary of the Supreme Court at San Francisco, as he has a record of the cases filed and by whom the decisions were written, while I have not. For me to ascertain the facts would necessitate the turning over of six hundred or eight hundred pages of minutes in bank and in department; and when I was through I could not swear it was an accurate account.

MR. DAVIS-Are the opinions handed down to the Secretary first? A. They are handed to him before they are transmitted to this office.

MR. TERRY-Can you state from such examination as you have made whether any opinions have been filed, written either by Morrison, C. J., or Sharpstein, J., since the twenty-sixth of May, 1886? A. I have examined the books, but would not swear there was no opinion written during that time by either of those Justices; for I have not a correct account farther than the minutes show.

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