National Republican., 1884-05-07
SWAIMPS FINANCIERING.
First Days Business Session Of the Court Of
Inquiry.
What the Different Counsel Have to Say
About the Case,
Mr.. Bateman Takes the Stand and Tells tho Story oI
tho Various Transactions.
Judge Advocate Scott on the Scope OF the
Inquiry.

Wibh hln Nuuhoulg AASpi0oohbhilNO tdihluo anu
Judge Johnston, and Dir. Bateman, who made
the charges against Gen. Swain, having re-
guested and obtained the permission of the
court to DO represented by counsel, also
appeared in the court room accompanied by
his attorney, Mr.. JEFF Chandler. Several
army officers and few other persons were
also present among them. Mr.. Butterworth,
the commissioner of patents, and for short
time Mr.. Humphrey, the contractor who
brought suit against Bateman & Co., on the
Swain due bill, which suit called out tho
charges made by Mr.. Bateman to the secre-
tary of war. When Mr.. Humphreys pres
ence was noticed by Judge Advocate Scott,
he was requested to withdraw las 1t is intended
to place him on tho witness stand.
Mr.. Calkins submitted q request that the
court direct the production Of certain docu-
ments in the possession of Bateman 81 Co.,
and cause the subpGnaing Of certain wit
nesses, which was agreed to by tho court,
after which O general statement of the
grounds Of tho accusation made by Mr.. Bate
man to the secretary of war was made by Mr..
Chandler. He said that Mr. Bateman, in his
letter to tho secretary of war, which was the
beginning of this controversy, stated that
Gen. Swain had received q duo bill from
Bateman & Co. for $5,000 This amount, it
was asserted by Mr. Batoman, had been
placed to tho credit of Gen. Swain on
tho firms books; that previously to
this Gen. Swain had had an account with
Bateman & Co., and that OH tho date OF
this deposit of $1,000 that account was over
drawn some 1907. The origin of the due bill,
he said was in this understanding Mr.. j.
Stanley Brown had beon engaged in business
with Batoman g. Co., and Gen. Swain
was inclined to aid him in securing tho
necessary capital. He loaned Brown $4,000
and gaye him check for an additional
$1,000, which he promised to make good.
Mr.. Brown afterward concluded to withdraw
from tho firm and arranged to do so. Before
his accounts were settled the indebtedness of
Swain was the subject of discussion and
adjustment. The due bill was then drawn
up. 1t included the 81, 600 cash loaned to Mr..
Brown and the check for $1,000 which, up to
that time, had not been paid. A memorandum
was mado at the bottom of tho due bill to this
effect: 40 per cent. and per cent interest"
the understanding being that Gen. Swain
was to have per cent, on tho money ad-
vanced and 10 per cent. on Browns profits in
the business. This 5000 then became in
corporated in the general account between
Bateman & Co. and Gen. Swain. The latter
drew on the account from time to time,
purchases were made on his account, on his
orders, and purchases and sales were at once
reported to him. From time to time he drew
out the entire 5000 except about 1888. 1t
would be shown that the accounts were
perfectly correct, and were received by
Swain as correct, and that he never expressed
any dissatisfaction with them, although
on two or three occasions he had asked for
some explanations, which were given him,
after which no further fault had been found.
1t could be shown also, Mr.. Chandler said,
that after tho money had been drawn out
Gen. Swain had transferred the account and
Mr.. Bateman had been sued upon it. This
transaction, he said, had injured Mr.. Bate
man, being direct attack upon his credit as
O banker, from which he could not but suffer.
and in consequence he had made the charges
against Gen. Swain to the secretary of war.
MIR. Chandler said In conclusion: 1--WE hope
to be able to show that this is an ordinary,
straight, business transaction 80 far as Bate
man 4 Co. Is concerned; that Gen. Swain
could have had no possible reason for mistak o
on this account when drawing out this money;
that he could make no mistake; that no had
no other account there, and that the transfer
OF this account was for some purpose not
beneficial to MI Bateman"
Mr.. Calkins, on behalf of Gen. Swain, re-
piled TO this statement Ho said that this
court could not undertake to adjust balances
in business transactions between the two in
dividuals. His understanding of its scope
and purpose was that it was appointed to in
quire whether a fraud had been perpetrated by
Gen. Swain on the firm of Bateman & Co.
The commission of fraud ho argued, involved
moral turpitude, and the intention to COM
mlU IrAuu was more OF IcSS oil a crime IN
itself. The defense, he said, would be able
to show in this transaction that, instead of
there being any intentional fraud on the
part of Con. Swain, tho whole thing was as
perfect business transaction as ever hap
pened between two men, where they had u
misunderstanding. Swain, he said, AS an
army officer had been dealing with Bate
man had been buying stocks. He saw no
harm in that. There is no law against it,
He began long before the transaction of the
due bill. When he gave the 81 900 check of
June ], 1882, to make up the 5000 for Brown,
he had already deposited several thousand
dollars with Bateman & Co.
Mr.. Calkins explained, as he understood it,
the manner In which stock broking is carried
on, and said "Whether or not there had
been transactions that had swallowed up the
money deposited by Gen. Swain, l don't
know, and / do not think Mr.. Bateman
knows" Coming to the Brown transaction,
he said: Gen. Swain lot Mr.. Brown have
$4,000 to go in with Bateman 6 Co. There
was an understanding that Swain was to
have more than q per cent. interest for the
use of his money. Mr.. Brown became dis
satisfied and asked Swain to make some ar
raugemeuts with Bateman & Co. about the
$4,000. The question was how Swain
should leave this money with Bateman Il
Co., but there never was an intimation
that this money should be left as
deposit. Gen. Swain was satisfied that the
firm would be responsible for tho due bill,
aud tho figures 10 per cent. and per cent.
interest on the due bill represented u sliding
scale of interest agreed upon between them
Ordinary deposits, said Mr.. Calkins, arc not
paid in this way; there must have been some
outside arrangement, and this transaction
was not treated by the parties as a deposit.
AS to the assignment OF the duo bill Mr..
Calkins said that after various transactions
between Swain and Batemon the two got
into u snarl. Swain had beOn complaining
and inquiriDg into his accounts; asking for
explanations that he did not got; demanding
statements that he did not got. The
business of this court, he interrupted here, is
to inquire whether Swaima claim against
Batemnn is an honest claim, not whether such
claim existed in law, that point bOing for u
court of justice to decide. Both mon might
be perfectly honest and yet entertain different
views as to the transactions between them.
lie then continued us to the assignment ofthe
due bill that Gen. Swain had repeatedly ap-
piled to Bateman l. Co. for his credits, but
without success. He put tho due bill
into the hands of Mr.. Humphreys,
one of tho contractors building his house,
and told him to present it for payment.
He did not wish to bring suit himself for
fear OF newspaper talk, but thought the pre-
sentation OF the noto by another party would
force MIR. Bateman to settle, After payment
had been refused, he allowed thirty days to
elapso before proceeding against Bateman,
and then directed the man to whom he had
transferred the note to bring suit for the
amount, and this was done, and was followed
by the charge made by Mr.. Bateman. The
following day an arrangement was effected
hetwaan awaim and Ratemnn ond tLo o,,t.