The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1907-11-14
Is Charged With the Misuse of
Funds Belonging to a
National Bank.
JURY SECURED WEDNESDAY
A STATEMENT is PRESENTED
SHOWING THE NATURE OF THE
FINANCIAL OPERATIONS CON.
QUOTED BY WALSH.

Chicago. Nov. 1.-The tri-L OF John
r. Walsh, ex-president OF the Chica-
go National bank, on charge of mis-
use OF the funds of that institution.
has formally opened.
The jury was completed shortly aft
er noon Wednesday and Assistant Dis
trict Attorney Fletcher Lobyns. at the
opening OF the afternoon session, com
menced the preliminary statement in
behalf OF the government. 1t is eX-
pected that Mr.. Dobyns will not con
clude his opening addle ss until late TO-
morrow.
The government will attempt to
show that Walsh took from the Chica-
go National bank, the Equitable Trust
company and the Home Savings bank
S14. 900 900.
In his statement Mr.. Dobyns declar-
ed that Walsh obtained the ownership
of various large properties without
cost to himself by using the funds of
the banks. He said 'watered stock
to the probable amount of $25.0O0.O0O
or $50. 100000 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 up his private enterprises. All
of the stock so sold by Mr. Walsh was
practically valueless. 1t was the
practice of Mr.. Walsh to make loans 70
one of his companies and then sell the
bonds of that company to the banks
These bonds were practically worth
! less"
The assistant District attorney then
stated to the jury how Mr.. Walsh had
induced various people to sign accom-
j mediation" notes for the bank
Then" said Mr.. DObyns, he sign
ed 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
whose names 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 Nat
ional bank was being loaded down
with the securities of Mr.. Walshs per-
sonal enterprises. The examiner or
dered him to take these securities out,
and Mr.. Walsh promised to do So
In 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 worse condition than ever, and
it was then ordered closed.
The government will show that
Walsh's method was to buy from him
self, fix his own price and put the
money in his pocket"
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 Mr..
| Walsh'S enterprises"
This company" he said, was or
ganized in 1899, and the capital stock
was fixed at 100000. Two hundred
thousand dollars was paid in and it
was all paid by others in the company
than Mr.. Walsh. Mr.. Walsh was to
hold 100000 of the stock and issued
certificates for bonds to that extent.
These were worthless but he put them
in his banks and took out money for
them with which to build up the COM
pany."