Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-01-19
THE LAW ON WALSH
Ex-Banker Must Face Trial for
Violating Banking Laws.
HOW MILLIONS WERE TAKEN
Curious Transactions Between Individ-
ual Concerns and Railways.
COUNTS AGAINST MAN ARE 1872
Amazing Conditions in the Manage
ment of Prisoners Bank Are Al
legged in the Indictment.
HOW MILLIONS WERE TAKEN
COUNTS AGAINST MAN ARE 1872

CHICAGO, January 19.-John R. walsh
was formally indicted yesterday under
charges carrying penalties which make the
| maximum possible sentence, in case of con-
viction, 1,S2O years There are 1S2 counts
in the documents
The law under which Walsh is indicted
| makes no provision for fines alone pun
ishment. In every case imprisonment is 4
part of the penalty provided by statute.
Walsh has hired John S. Miller, the law
yer who won immunity for the beef packers
and who is fighting to save the Standard
Oil Company.
Walsh appeared in court this afternoon
and February was set as the date by
which time he must plead or file demurrers
to the indictments. Bond of $50, 600 was fur
nished.
Amazing conditions OF rottenness in
Walsh's bank are charged in the indct-
ment. Walsh, it is charged, put the banks
money into his pockets in amounts exceed
ing 100000 at time 1t took months to
trace the expenditure of S2.G24 S7I75 il the
banks books. Transactions involving the
issue of twenty-five memorandum notes.
the sales of thirteen lots of bonds to the
bank and of fifty-seven payments by Walsh
to the railway companies and industrial
concerns he attempted to finance are de-
scribed i'll the indictment.
Shadowy Operations.
The extent of the operations uncovered
by the two weeks grand jury investigation
startled the governments attorneys, pre-
pared though they were for astounding
revelations. Walsh, according to the in
dictment, sold to the bank in four years
bonds for which he credited his personal ac-
count with SSG2 240 10; In the same time he
realized S2,O33. 17614 on memorandum
notes" alleged to have been fraudulently is
sued
From his personal account of 50 $40 1867
Walsh paid out within the period covered
in the inquiry a total of 81, 634. S7T.77, which
the government declares he had no bust
ness to do The money went, as into a
hopper sometimes at the rate of S2D0,O0O a
month, to feed his railway corporations.
from which Walsh hoped to gain wealth
and power.
Tables prepared by the governments at
torneys show the manner in which Walsh
raised funds for carrying on his railroad
enterprises. These indicate that he in
creased at will the amount entered to his
personal account in the bank by making
out memorandum notes." to which he is
charged with signing the names of obscure
clerks and for which he gave collateral
the bonds of his own railroads.
How Deals Were Executed.
When this money was transferred to his
personal account he would pay it out
drafts drawn in the names of his various
railroads. The only, return given to the
stockholders, it is charged, We're those I'M
marketable bonds and the signatures of
the clerks. who were unaware of the exist
ence of the notes. By this process Walsh,
it is alleged, realized nearly s3.e000O0 all
of which was sunk in the railroads This
scheme of raising money from the funds of
the depOsitorS was begun January p, 1894,
and continued. until February 10, 1905, it is
alleged
On one date, January 81, 1900 seven notes
for $4,000 each were placed in the bank,
and $4,000 each note was turned over
to the credit of Walsh, total of 100000.
The table revealing the disposition of this
money shows that on the same day $685., 900
was turned over to the credit of the Wis
consin and Michigan railroad, of the
Walsh lines.
The table shows too, that money was
first transferred to the Equitable Trust
Company and, it is believed, later to the
railroads.
Drawn by Pagin.
The Indictment was drawn by Oliver E.
Pagin the governments Indictment expert,
who was in conference with District At
torney Sims throughout the investigation.
The work of investigating the books of
the Chicago National Bank and getting the
evidence in shape was done by Edward T.
MoXey, special bank examiner. 1t occupied
nearly a year.
The government expects to prove that the
bonds which Walsh loaned himself S.
SOS 900 of his banks funds are unmarked
able and worthless bank assets and that
no well-conducted bank would have &C
copied them for even a small part of the