The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-12-19
journal Special Service.

journal Special Service
Chicago, Dec. 19.-John r. Walsh
and the officers of his insolvent banks
the Chicago National, Home Saw
ings and Equitable Trust-face certain
prosecution at the hands of the national
and state authorities.
National Bank Examiner Bower. who
by the irony of fate, is discharged
employee of John r. Walsh, and whose
inside information as to the bankers
methods made the work of investiga-
ton comparatively easy, has laid the
facts in the case before United States
District Attorney Morrison. Mr.. Nor
rison is expected to reach a decision
as to what action he will take within
less than fortyeight hours. A new fed
cral grand jury is in session, begin
ming today.
Two state bank examiners already
have partly. reported the results of
their investigation to State Auditor
. Mccullough and he will lay the case
before Attorney General Stead.
Barred by Joint Action.
The federal and Illinois authorities
have been working hand in hand for
the last three days. It was only by
joint investigation that the bank
ruptcy of the banks was proved. This
investigation was made at the urgent
q, request of the federal authorities.
Prior to this, when the federal au-
thorities made their investigation of
Mr.. Walsh 8 national bank, the secu1-
tiles of the Home Savings bank were
luggled and made to appear as assets
of the national institution. When the
state sleuths examined the Home Saw
ings bank, somebody hoped from one
side of the room to the other and re-
- turned with the stock and bonds be-
longing to the federal bank.
The authorities, it is believed, will
have the widest latitude in prescott
ing Mr.. Walsh, as investigation shows
books, placed there for the safe con-
duct of banking business, has been VIC
lated by him with reckless impunity
Walsh Concerns Not Banks.
John R. Walsh IS banks were not
banks. They were simply huge cash
drawer for his side lines of railroads,
mines, stone quarries and other bust
ness investments. There was hole
into the pay envelopes of graders, fire.
men, locomotive engineers, stone quar-
rymen, coal miners and laboring men
- of thirty different trades
The depositors dumped their money
into this omniverous cash box, and it
DIS NSeu ny NMi. walsh Ill d vain Gu
deavor to turn into q golden reality his
dream of railroad and allied CONNER
cial supremacy.
Out of the $26,ooo,Ooo deposited in
the halfway financial station main
tanned by Mr.. Walsh, $15,00O,00O was
= loaned by Mr.. Walsh to companies pri
vately controlled by himself.
Walsh's Loans to Walsh.
He had been lending money to hi:
various railroad and mining enterprise!
on their bonds as security for a mum
Der of years, and had been repeated,
Der of years and had been repeatedly
warned by both the controller of tn,
- currency and the state auditor that h
must change this practice and dispose
of such bonds as security for loans.
But not until a short time ago wa
it discovered just how these loans wer
being manipulated and their size.
The Home Savings bank has been
hagrant violator of good banking prac
posits which it had, there was in actua
& cash in it's vaults less than one-hal
of 1 per cent to pay depositors. Ac
cording to the state bank laws, ha
there been run on the bank, the lat
ter could have awaited itself of tn
right to demand sixty, days, notice. a
it had only savings, all of the deposit
would have remained intact for tina
period.
Remarkable Story.
- The remarkable manner in which th
financial world withstood the troub]
of these three institutions forms a stor
that has never been equaled in tn
worlds history and monetary affair
Immediately after the announcement c
the failures furry was precipitate
in the great stock markets. of Ne
York and Boston. Even in Londo
there was a menacing decline in value
-" But before the furry could spread flu
Their than the sensitive speciality
world came the announcement that tt
Chicago clearing house had rushed
the rescue; that depositors would
paid in full; that all interests woul
be amply protected, and that in Oh
cago, where the result would be mos
felt, not a ripple had been created
At once the markets in the east an
- across the Atlantic became stead
Spectators became treasured and tt
bourses closed in a stronger positio
than on Saturday. ~-
Paid Out Millions.
The doors Of the banks were opene
at the usual time in the forenoon, an
turnout the day q steady stream Of d
positors poured in and out of the ma
posits estimated at $2,4OO,0Oo were pa
out by the Chicago National ban
while the Home Savings bank sure
dered an amount estimated at $4,000
Late in the day tentative plans we
discussed, it was reported and later d
Continued on I'd Page, 4th Column.