The New York herald., 1872-12-10
THE Waikiki BANK DEFALCA-
TON.

The Charge OF Embezzlement Against
Ex-senator william M. Graham
What Are "Banking Dummies s''-Phe
Defendant Paying Out Tyveed's Checks.
Yesterday Commissioner Osborn commenced 10
take testimony in the OF the United States ys
Ex-senator william M. Graham, who is charged
with having, while acting President OF the Wall
Kill Rational Dank OF Middletown, N ", embezzled
100000 the property OF the stockholders of that
institution. large number OF the directors Of the
bank were present Mr.. Charles G. Din appeared
on behalf OF the bank Mr.. Purdy for the govern
ment ana Mr. Charles s. Spencer FOR the prisoner.
TESTIMONY FOR THE PROSECUTION.
Mr. Schlosser, Teller OF the Waikiki Bank, was
the first witness: He was shown paper, which
ne declared to be banking dummy represent
Ing note which had been left at their office dur
note; Mr.. Graham asked the witness to mark on
the collection book 'discounted." On cross-ex-
ANIMATION the witness said he was not aware
tnere was any wrong In the transaction; it was
nothlng unusual to have "dummies.o
Dr David G. Winfield, one OF the directors OF the
Dank, testified that the bank stopped or suspended
ON the 10th Of November meeting OF the directors
was held last Wednesday week; they sent Tor Mr..
Graham; witness said to him that Mr.. Madden
had been told by Horton, the Cashier, that Mr..
Graham was dclaultcr to the amount OF
$4,000; witness asked Mr.. Graham il that was
true; he said he did not want to answer that ques-
tion until Horton came back; we asked him what
ne did with the bonds and money which he had
either from the Park Bank or from the First Ma
tlonal Bank, with both OF which the Waikiki Bank
was in the habit Of transacting business; Mr.. Gra-
ham said he had drawn $9,0OO and had applied
$4,000 to redeeming some bonds which, he stated,
belonged to his atherinlaw, and had given tho
bonds to him. when asked for the 81 900 he said he
mad II at his house; he went there, got 1t and gave
II up, unwillingly, as the witness thought;
when he was asked how he got the money
to redeem the bonds Mr.. Graham said he
took down some drafts and the rest they had in
bank. Witness subsequently had q conversation
privately with Mr.. Graham, who admitted 10 him
that ne had privately used at one time a large
amount Of the funds OF the bank; that he had paid
the bank back with a check OF william M. Tweed's
lor $25,OOO and with another check $40 900 and
authority OF the directors $40 600 and $40 600 were
borrowed nom Mr. Denton and about $4,000 from
the Park Bank, 80 that you could 'retirer certain
amount; did not know that the law required the
casnler TO make certified statement every year !;
the bank directors met but once year.
In the course or The investigation Mr. Spencer
counsel for the accused, several times stated that
the charge against Mr. Graham was not specific
that 1t merely embraced the broad and general
language OF the statute, and that the atildavt
charging the offence was indefinite.
The Commissioner ruled that in order to main.
tain the charge IL must be proved that there was
deialcaton, that the defendant was connected with
that defalcation, and that the body or the offence
must be proved.
Mr.. Spencer replied that that was exactly what
he wanted. They should lind ont how far Mr..
Graham was responsible, SO that they might have
something definite to answer.
The further hearing OF the case was adjourned for
week.