The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-03-03
JOHNR, WALSH UNDER ARREST
u,yKER HELD UNDER S5O,OOO
ROyDS FOR ALLEGED CRIMES.
Ia Charged with swearing TO a False State
ucnt TO Comptroller OF the Currency,
MIsapplying IS 900 900 of Banks
. Funds and with Intent TO Defraud.

Cufc,Go, March John r. Walsh,
former president of the Chicago National
Bonk, was arrested this afternoon.
He is charged with perjury under oath
70 the Comptroller of the Currency and
with wi)rully misapplying 100000 OF the
funds of his institution.
He vas arraigned and admitted to bail
in $4,000.
The United States Government declares
his act was with intent to defraud the stock
holders in his bank. The former banker
was arrested at the Grand Central station,
where he has had Offices since his bank
failed, by United States Deputy Marshal
Thomas Middleton.
Fred NJ. Blount, the former vice-presi-
dent Of the Chicago National Bank, was
with Mr.. Walsh when i've gave bond, with
the Illinois Surety Company as guarantor'
He gave out for Mr.. Walsh the following
statement;
The charge in effect ia that as president
of the bank | signed a report to the Comp
tIOlInT, WIllCIl ltIOlI ~ 10 dilV6th WOO ioh'o'
The report in question would ordinarily
have been signed by the cashier, but by
reason Of his temporary absence it was
signed by me as a matter Of course. The
report referred to was undoubtedly correct
In every particular.
These facts will be clearly established
If the case caches a sta &c where evidence
is produced. / believe, however, that
a more thorough investiga ton Of the facts
by the Department Of Justice and a COM
~rarison of the report with the books of the
bank will oonvince the Department that its
action is uncalled for and cannot be sus-
tanned"
The case was set for hearing Saturday,
March 10, at 10 A. NJ.
News Of the arrest was sent to James c..
Hutchins, counsel for the Clearing House
Committee, in charge of Walsh's affairs.
Mr.. Hutchins made a hurried trip to the
Federal Building and remained for some
time In conference with United States Dis
trict Attorney Charles B. Morris, Upon
whose complaint Walsh was arrested.
Oliver E. Pagin, Assistant Attorney
General, drew the complaint a against Walsh.
THE arrest of the former banker and rail-
road owner came as a complete surprise.
Not a whisper of his danger preceded the
appearance of the beputy Marshal at
Walsh's office.
1t is declared that on November o, 1905,
Walsh made a false sworn report Of the
-.I:t,.. - A. Tkiooea NIot;o.oI porI,
In this respect it was shown hat The loans
and discounts Of the institution for which
the officers and directors of the bank were
liable amounted to s2ij 900. The fact is
alleged to be that these loans and discounts
exceeded $4,000, 600.
The report carried detailed statements,
it is declared, showing that the amount
OF loans and discounts for which the officers
and directors of the bank were not liable
amounted to SIC, 1858, 226.6i. 1t is charged
that the actual amount was only 81, 500, 900
This leaves a difference, as stated in the
Information against Walsh, of 90, 1853, 228.6 "a.
This is said 10 be the exact amount of funds
risapplied by the defendant.
The procedure in such cases is directed
from Washington. When the Comptroller
olthe Currency has collected the facts he sub
nits them to the Attorneys General, who
orders the investigation. II he is satisfied
that the charges are true he instruots
the United States District Attorney to
sign a complaint and order the arrest of
the alleged guilty parties.
In the concluding paragraphs Of the
complaint it is asserted that Walsh diverted
the funds of The bank to his personal pur-
poses. 1t is declared this was in pursuance
ola plan to defraud John NJ. Smyth, William
Fest and other stockholders of the bank.
Smyth and Best were directors. They are
the only sufferers among the directors
named in the complaint.
The arrest OF Mr.. Walsh came as a direct
result Of the last examination of the books
of the bank by Special Bank Examiner
Arthur L.. Curry, sent to Chicago from
Washington, When he returned to Wash
ington his report was made to the Treasury
Department and, it is declared, a con-
sultation was held between Cabinet officers
and the President concerning the matter. |
Acknowledgement William NJ. Moody was
then instructed, 1T is said, to take the matter
up criminally in Chicago.
The data furnished by Examiner Curry
we're sent to Chicago and placed in the hands
of District Attorney Morrison. The data
arrived this morning with instructions to
take proper steps.
Assistant District Attorney Robert ChiIds
vas detailed on the matter with Assistant
Attorney General Oliver r.. Pagin. Strict
Secrecy was"ordered by the District Attor-
bey. The complaint was drawn up, cover
Ing four type written pages. 1t was then
submitted to United States Commissioner
Mark A.. Foote and sworn to. On this COM
plant the warrant was issued by Com
missioner Foote and placed in the hands Of
Marshal John G.. Ames. He detailed Deputy
Marshal Thomas Middleton on the case.
In the meantime, it Is said. Mr.. Walsh
was under careful watch of Government
agents. Friends of Mr.. Walsh asked a
delay OF an hour to arrange matters. This
was granted, and then there were two sue
ceeding extensions Of an hour each. Shortly
before 2 O'Clock Mr.. Walsh and Deputy
Middleton appeared at the Federal build
ing and went Immediately to the Office of
Marshal Anies.
Shortly afterward, Fred NJ. Blount and