Los Angeles herald., 1907-11-14
WALSHFACES
A TRIAL JURY
OUTLINES CASE
AGAINST FlNANcIER
Former Head of Big Chicago Institu-
tion Accused of Juggling Funds
and Appropriatng Money to
Private Enterprises

| BY Associated Press. v
| CHICAGO Nov 13.-The trial of Johr
! r. Walsh, former president of the Chi
| cago National bank, on charge Oh mis-
use of the funds of that institution, was
opened today.
The Jury was completed shortly after
noon, and Assistant District Attorney
Fletcher Dobbins at the opening of the
afternoon session. commenced the pre-
lIminary statement in behalf of the gov
ernment
1t is expected Mr.. Dobbins will not
conclude his opening address until late
tomorrow.
The government w. attempt to show
that Walsh took from the Chicago Ma
tional bank, the Equitable Trust COM
pany and the Home Savings bank $l4,-
000,O0
In his statement today, Mr.. Dobbins de-
clared Walsh obtained the ownership
of various large properties without cost
to himself by using the funds Oh the
banks. He said:
sWatered stock to the probable amount
of s25, ,OOO 900 or $4,000, 900 was issued. Mr..
Walsh, through his employees, voted the
stock to himself. He then sold this stock
to the banks, taking the money to build
I'D his private enterprises. All Of the
stock so sold by Mr. Walsh was prac-
tically valueless. 1t was the practice OF
Mr. Walsh to make loans to one of his
companies and then sell the bonds of
that company to the bank. These bonds
were practically worthless"
Got Money by Notes
The assistant district attorney then
stated to the jury how Mr.. Walsh had
induced various persons to sign "ac-
commodation'' notes for the bank.
Then said Mr.. Dobbins. 'he signed
the names of people to notes. Checks
were made out payable to bearer and
credited to the personal account of Mr..
Walsh. Bonds were made out to the
same dummies who were on the notes,
and the credits were made to Mr..
Walsh's account.
'In 1903 Mr.. Walsh was told by the
bank examiner that the Chicago National
curities of Mr.. Walsh's personal enter
prises. The examiner ordered him to
take these securities out, and Mr.. Walsh
promised to do so.
an 1904 the bank was found in the
same condition, the warning was re-
peated, and Mr.. Walsh again promised
to remove the securities. Another ex-
animation showed that the bank was in
a worse condition than ever, and it was
then ordered closed.
illustrates WaIsh's Methods
AS an Illustration of Mr.. Walsh's
procedure in matters of finance the
assistant district attorney cited the
Peoria Gas and Electric company,
which he referred to as perhaps the
least Objectionable of any of MI
Walshs enterprises"
"This company" he said, was or
ganized in 1899 and the capital stock
was fixed at $500,000. Two hundred
thousand dollars was paid in and 1t
was all paid by others in the company
than Mr.. Walsh. Mr.. Walsh was to
hold S300,000 of the stock, and issued
certificates for bonds to that extent
These were worthless, but he put them
in his bank and took out money for
them with which to build up the COM
pany"
An objection by the defendants
counsel at this point was sustained by
the court, and Mr.. Dobbins passed to
consideration of the Southern Indiana
Railroad company, reviewing its his
tory up to the time Mr.. Walsh pur-
chased 1t for $175,000.
HE had issued to himself" Mr.. Dob
bins said, "$300,000 in bonds at the
very time it was organized and those
bonds had no value. He put them into
the Equitable Trust company, selling
them at par, then issued another
500. 900 OF bonds and sold them at par.
HE took the money from time to
time from the Chicago National bank
(Continued ON Page Two)