The Unraveling of a Port Angeles Banker
A failed banker faces fraud charges after an elaborate web of double-mortgaged land and missing notes ensnares local ranchers.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
B. F. Schwartz, of the defunct bank of Port Angeles, is again in the toils. Yesterday Mont Gay swore out a complaint against him for fraud and embezzlement. Last November, W. R. Gay negotiated a loan from Schwartz for $1,200. As Mont Gay had recently proved upon his land claim, Schwartz suggested he secure a loan on it to pay the debt. Mont Gay made a note for $1,200 and gave Schwartz a mortgage on his ranch. Shortly after, W. R. Gay went East, and Schwartz claimed he could not get $1,200 on the ranch, but could get $800. Mont Gay agreed and signed a second mortgage. When asked for the original notes, Schwartz pleaded confusion. When W. R. Gay returned in May, a lively scene occurred, and Schwartz finally provided a release for the first mortgage, claiming the note was lost. The charge of embezzlement was triggered by a suit from Banker Peters of Tacoma, who held the first note and is now suing to set aside the release. Schwartz appeared before Justice Burnside and was bound over under a $2,000 bond, which he secured with great difficulty.
“Schwartz finally gave a release of the first mortgage and turned it over to Gay, also stating in writing on the mortgage that the note was lost and had never been negotiated.”
Financial schemes targeting land-rich but cash-poor settlers are a recurring motif in the history of Washington development. This dispute echoes today’s conflicts over predatory lending and the murky, opaque nature of real estate transactions that still leave homeowners vulnerable in a volatile market.
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