The record-union., 1898-12-22
THE BUILDING AND LOAN CASE
BANKERS EXPLAIN HOW BUSI-
NESS WAS DONE.
A Day Spent Among Ledgers, War
rants, Pass Books and Fig
ures in General.

When the case of T. w. O'Neil, re-
ceiyer Of the Union Building and Loan
Association, against the National Bank
Of d. 0. Mills & Co. was called yester-
day morning the first witness was Pres
ldent Frank Miller OF the bank, who
had been on the stand all day Tuesday.
MIR. Miller was asked whether it vas
not fact that people would have had
confidence in the association if the bank
had been its Treasurer
He said he thought that such treas
ureship might have inspired confidence.
He was pressed on the point by Grove
L. johnson, and asked why the bank
had allowed the impression TO go forth
that it was the Treasurer of the asso-
citation if it was not. He said:
we are often described as repositories,
correspondents or treasurers of various
corporation and societies, but do not
not know the legal difference AS
understand it (and witness was allowed
to answer against plaintiffs objections)
we We're simply repositories for the
loan society,"
The next witness was Charles f. Dill
man, Cashier of the bank, also Di-
rector of the bank. "Mr. Miller and 1
and if either of us oppose a loan it is
not made. We never received any no
tice that we had been elected Treasurer
OF the loan society. They had a regu-
lar account with the bank. however We
loaned the association some money,
the loan being negotiated by Stenman
and Alsip. They called about February
10th and the loan was made on the 18th.
There were many preliminary talks
about it, They wanted about 500, 900,
and we told them that our limit was
$oO,OUO, so the loan was made. Alsip
SAID that the request for the loan was
made pursuant to resolution passed
at d regular meeting Of the associa-
ton. The loan was executed after the
securities were delivered I did not
know that the association had over
valued the property on which it loaned
money. No Director or stockholder of
the association ever complained to me { f
the illegality Of the loan. Some of the
original collateral security notes were
returned to Mr.. Alsip by u.s. so he could
have them renewed"
On cross examination witness stated
that he and Mr. Miller had absolute con-
! troll of the loans of the bank This loan
was ratified by the Directors of the
bank. He said he was never member
of the loan association or of any other
like society. He knew that loans could
not be made to corporations unless res
OlutiOnS authorizing the borrowing had
been passed. He had no official knowl-
edge that the bank was considered the
Treasurer of the association, but had
seen vouchers and notices to that eff
feet
NO other patron of the bank" he
said, draws warrants on us in lieu of
checks, but other firms sometimes
print on their letter heads that we are
their depository. The first talk l had
concerning the loan was with Steinman
four or five months before it was made.
/ directed Alsip positively to have the
proper resolution made before the loaa.
1 left to him the drawing of the reso-
luton, but consulted no lawyer on the
matter. We paid out $40, ,0O0 as we'll
| as the $4,000, on checks, and supposed
| that they went to the holders of the
sixth series We collected no interest
or principle on the pledged securities
until after the crash. We did not learn
how much he collected or how he did
| business. We never expected that it
would be necessary to proceed against
| the collateral. I made a demand on AL
sip to pay up the notes faster, and when
he delayed I punched him up but / did
| not suggest that he pay up by collecting
| the delinquencies."
The foregoing comprised the forenoon
testimony.
In the afternoon Cashier Dillman was
recalled on cross-examination. He ex-
planned the technical meaning of va
rious stamps, Endorsements, etc, on
notes "The 100000 referred to in the
| morning examination was Withdrawn
almost immediately" he said, but it
was not all exhausted for a month or
so. Alsip had a personal account with
the bank but it was closed in June
1894 Alsip withdrew some of the Or
| iginal securities and replaced them with
others"
Attorney Johnson pressed the witness
| as to whether any notes and mortgages
were ever surrendered to Alsip
for any purpose, but witness could not
answer without consulting the books of
the bank. He replied that he could not
answer without consulting records, and
even then he might not be able to reply
in detail.
The question was objected to- where
| upon a long argument on the legal
phases Of the question ensued. 1t was
decided that the matter might be in
quired into in detail, but witness did
not remember much about the memo
randa. He testified that the bank kept
no separate record Of all notes and
mortgages that We're turned over as
collateral. Witness swore that AIsfp
had been in the habit of paying and
stamping warrants, then passing them
through the bank as charges and cred
its. A large part of the afternoon was
exhausted in a description of the
technique of the business transacted
at the bank
After this the minutes of the meeting