Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1906-03-03
RETURNS TO COMPTROLLER ARE JUeeLtr
Warrant Says Illegal Loans Of S3,0oo,o0o
We're Concealed.
UNI CONVERTED TO HIS OWN USE
Directors Are Accused of Assisting in
Manipulation of Funds,
Mr., WALSH DENIES WRONG DOING
He Says After Report IL Compared
with Rocks of the Bank tho
Charges VIII BE with
drawn.

CHICAGO March John r. Walsh,
president of the defunct Chicago National
bank, which closed its doors December Is.
1906 was today taken into custody on a fed
eral warrant which charges him with vio-
lation Of the national banking laws In maxi
ing false returns TO the comptroller of the
| currency, and also asserts that he con-
verted to his own use without proper au-
thority funds Of the bank amounting to
81 0oo,OOo He was released after giving
bonds Of $4,000.
The complaint alleges in specific terms
that on November Is. 1905 the Chicago Ma
| tional bank transmitted TO the comptroller
of the currency a statement of tho finan-
ciel condition Of the bank at the close Of
business on November O. In this statement
"the said John II. Walsh unlawfully made
certain false entries to the effect that at
the close of business of the 9th day of No
venber the amount of loans and discounts
Of the said banking association on which
the officers and directors thereof were then
liable either payer or endorser was s2i5-
COO, whereas i'm truth the amount Of such
loans and discounts was $4,000; and an
other false entry TO the effect that the
amount of loans and discounts OF the said
association on which the officers and direc-
tors were not liable as payers cndorsers
was sl065S23, whereas in truth the amount
of such loans and discounts on which off,
GERS and directors were not liable, was
much smaller namely. S7,5Oo,O0O."
Another section of the complaint alleges
that Walsh had in his possession funds and
moneys OF the bank amounting to 100000
with intent to injure and defraud" the
bank The 100000 mentioned I'm this sec
Of Tha ,pIni int IS hon I.uI
with the amount specified as being loaned
| to officers of the bank
Charges Against Directors.
It is further alleged that John Il. Walsh
and John NJ. Smyth and William Best.
| directors of the bank, "and other persons
too numerous to mention" unlawfully mis-
| applied this money by converting II to the
personal and private use of John r. Walsh
without any proper authority whatever.
I The arrest of Mr.. Walsh came as the
direct result Of the last examination OF the.
books OF the Chicago National bank made
| by Special Bank Examiner Arthur J..
Curry. sent to Chicago from Washington.
! The data furnished to the Treasury depart
ment in Washington was sent to District
Attorney Morrison I'm this city, with In
structions to take tho proper steps in the
matter.
Mr. Morrison early today swore to the
complaint before United States Commis-
| soner Foote, who issued a warrant for the
arrest of Mr.. Walsh and placed IL in the
hands of Deputy Marshal Middleton.
Mr. Walsh was found I'm his office and
placed under arrest. but friends of the eX-
banker asked that the officer wait for
few hours before allowing the news of the
arrest to become public. because of some
financial matters that might be affected.
This was granted, and twice more the
friends of Mr. Walsh asked and obtained
a brief respite. A short time after
o'clock however. Deputy Marshal Middle
ton refused to wait for a longer time. AMI
took Mr.. Walsh to the Office of United
States Marshal Ames.
All of the doors leading to the private
office of Marshal Ames were locked. and
all attaches of his Office and those of Dis
trict Attorney Morrison were instructed 10
say nothing concerning the arrest Mar
shal Amos declared that so far he knew
nothing had been done in the Walsh mat
ter. and District Attorney Morrison ex-
pressed himself in the same manner
After remaining in the Office of Marshal
Ames for two hours Mr.. Walsh was
leased under bonds furnished by the Illi-
nois Surety company.
MIR. Walsh Denies Charges.
After being released ON ball, MI. Walsh
made tho following statements
The charge in effect is that president
Of the bank | signed report TO the comp
trollcr. which report, IL is now alleged, ~
, false. The report in question would ordi-
narily have been signed by the cashier,
but by reason of his temporary absence u
was signed by me as matter OF course.
, doubtedly correct in every particular. These
facts will be clearly established by the evil
. dence If the case reaches a stage when
fg hon
that a more thorough investiga ton of the
facts by the Department OF Justice and a
cumpa rison OF the report with the bank
books will convince the government that
its action Is uncalled for and cannot be
| sustained
/ ANY inference that might he drawn from
the complaint that there has been any
misappropriation OF funds in any way is
absolutely false
The preliminary hearing Of Mr.. Walsh
before United States Commissioner Footc
was set for March 10 at 10 a. m.
Moody Ordered Prosecution.
WASHINGTON, d. c., March 2.--Attor-
ney General Moody admitted tonight that
! the proceedings AT. Chicago culmna tins in
the arrest o. John h. Walsh on a federal
/ warrant charging violation OF the banking
| laws We're the outcome Of Instructions
given to District Attorney Morrison grow
ing out OF the failure OF the Chicago Ma
tional bank. The evidence in the case upon
, which Mr. Morrison based his action in
cludcd that submitted by the Office of the
comptroller OF the currency and other evil
dcncc which the Department Of Justice
had I'm hand The attorney general did
not feel disposed TO discuss the matter.