The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1897-12-08


The trial of James H. Bacon, presi-
dent at the time of its collapse of the
Bank of Salt Lake, was opened yester-
day in the federal court before Judge
Marshall, on the Indictment returned
by the grand jury in which Mr.. Ba-
con is charged with making false. en-
tries on the books of the bank and
sending a fraudulent report to the
comptroller of the treasury at Wash
ington. when the institution was a ma
tional bank.
The trial yesterday was lacking in
sensational color, as most OF the ST.
mony was on technical points. Very
few spectators We're present when the
trial began in the afternoon. The de
PENDANT was represented by Colonel FL
lis and Attorney H. Z. Booth, and as
Judge Judd was one of the witnesses
for the prosecution, the fight on behalf
of the government was made by AS
sistant District Attorney McGinnis.
The imDaneling of the jury occupied
about TWO hours at the morning SEES
sion, at the conclusion of which the
Y jurymen selected were: H. G.. Whit
ney, Lewis NJ Cannon, Robert Sher-
wood, r. S. Wright, j. c. Christensen,
Edward Rush Richard Brereton, John
Reid, T. S. Beattie, Joseph S. Clark,
Edward Morfan and Thomas Levy.
The defendant and the attorneys who
viii make the war for his eXoneration
were the first arrivals at the federal
court in the afternoon.
PROSECUTION OPENS.
Mr. McGinnis fired the first gun by
reading the grand jury's Indictment,
which sets forth in eight counts the
governments case against the eX-bank
president. When the recital was con-
Guided, Mr. McGinnis made his openf
ing statement to the jury of the facts
upon which ne expected to convict the
defendant. After detailing the alleged
Irregularities in entries and the report
to the comptroller, he said: I'VE shall
prove absolutely that these entries are
false; we shall prove that whereas the
books indicate that the bank was
owner of q, 900 shares of sanitarium
stock, it in reality never at any time
had possession of such stock. Finally
we shall show that in the report to the
comptroller, that the overdrafts APP
peared only to amount to $500, when
they really amounted to $4,000. 1t is
our intention to prove that the notes
by which the shares of sanitarium
stock were supposed to have been OBJ
tanned were fraudulent, and were not
paid and were never intended to be
paid"
STATEMENT OF THE DEFENSE.
Colonel Ellis for the defense, made
counter statement, saying that he did
so because the jury might be misled
by the prosecution, in whose mind
there seemed to be some confusion. He
claimed that the bank in reality had
the $4,000 worth of Sanitarium stock
and We're prepared to prove it. The
Overdrafts he said, in reality amounted
to approximately $4,000, but the
amount exceeding the $500 referred to
was legitimatelX. chargeable to loans
and discounts, where the entry proper
ly belonged. This being true" he con-
tinued nothing remains of the prose-
cution's formidable array of charges.
In 1888, when banks were topping over,
the stock was paying 8 per cent inter
est, and was worth more than it's par
value, and was legitimately valued at
SIS, 000. The debts of the bank, he said,
had all been eliminated, and it was
flimsy charge the prosecution was MAX
ms about something which happened
four years before. The defense was
prepared to show that the officers and
directors of the bank, as guarantors
and others, were liable for $685. S98. 26,
notwithstanding the contention of the
prosecution, that they did not owe this
amount.
MI. 3TcGinnis then produced a GER
tificate of incorporation and papers au-
thorizing the organization of the bank,
which were admitted in evidence.
TESTIMONY OPENS
L. S. Hills president of the Deseret
National bank, was then called, and
save some testimony as to the usual
form followed in the making out of re-
ports to the comptroller.
Several objections were entered by
the defense 70 the introduction of Mr..
Hills testimony, which were overruled.
In reply to q question as to the proper
| place for oYeTdrafts to appear in a re-
/ port, Mr.. Hills said that it would be
improper to put them under any other
head than that Of "OVerdrafts," and
that it could not legitimately come I'M
der Loans and Discounts Cross-ex-
amined by Colonel Ellis, Mr. Hills said
he believed that if overdrafts were
placed under the head of Loans and
! Discounts, the statement of liabilities
and assets would remain, unchanged.
! Judge J. w. Judd, a former director
of the bank, was the next witness. Mr..
! Judd testified that the handwriting OF
! the report TO the comptroller, which
! was produced by Attorney McGinnis
was MIR. Bacon's, with the exception OF
! a few words.
Asked in REORGANIZATION by Col
onel Ellis, what he knew about the
| bank owning Sanitarium stock, Judge
Judd said: Il never knew that the
| American National bank had any stock
in the Sanitarium.
Did you not, in your official capac-
ity, as a director, sign a report to the
comptroller that the bank owned shares
in the Sanitarium?"
las to that, l will state that a letter
was brought to me While at Provo by
Harvey Bacon, and I signed it while il
the conrt room, on the strength of his
assertion that it was all right. 1 die
not read the letter I had absolute con
fdence in Mr. Bacon
A letter was here produced, which
Judge Judd admitted to be a copy Of
the one he had signed. Some figures
were also handed him, which he also
admitted to be his.
In response to questions by the pros
ecution. Judge Judd said that he ha(
taken the figures from MIR. Bacon, with
out having any personal knowledge a:
to the status of the banks affairs
Did you not discuss the contents o.
the letter you signed at Provo before
going there?'
1.-The subject was discussed fully, but
as l said before, | took the statemen
OF Mr.. Bacon for granted, and did no
/ personally investigate the assets anC