Abilene weekly reflector. [volume] (Abilene, Kan.) 1888-1935, 1907-11-21
The WALSH TRAIL
The Statement Of Prosecuting At
torney Shows Some Startling
Samples Of Frenzled Finance
how NE BROKE THE BANKS
Sold ValueIess Stock to the lnstltu
lions Under His Control And
Took From Them Amounts
AgsregatIng &14,ooo,o0o.

chicago, NOV. l4.-Ine tTldl VI JUN
r. Walsh, ex-president Of the Chicago
National bank, on q charge Of misuse
Of the funds of that institution, for
mally opened Wednesday. The jury
was completed shortly afternoon, and
Assistant District Attorney Fletcher
Dobyns at the opening of the after
noon session commenced the prelimi
nary statement in behalf Of the gov
eminent. 1t is expected that Mr..
Dobyns will not conclude his opening
address until late Thursday.
The government will attempt to
show that Walsh took from the Chi
cage National bank the Equitable
Trust company and the Home Saw
ings bank S14,000,OOO.
In his statement Mr.. Dobyns de-
clared that Walsh obtained the own
ership of various large. properties
without cost to himself by using the
funds of the banks. He said:
"Watered stock to the probable
amount Of $25,00O,0O0 or $SO,OOO.OOo
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 pri-
vate enterprises. All Of the stock so
sold by Mr.. Walsh was practically
valueless. It 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"
The assistant district attorney then
stated to the jury how Mr.. Walsh had
induced various people to sign "ac-
commodation" notes for the bank.
"Then," said Mr.. Dobyns, che 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 whose names
were on the notes, and the credits
were made to Mr.. Walsh's account.
an 1SvS, Mr.. Walsh was told by the
bank examiner that the Chicago Ma
tional bank was being loaded down
with the securities Of Mr.. Walsh's per-
sonal enterprises. The examiner or
iered 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 a worse condition than ever and 1t
was then ordered closed.
"The government will show that
WaIsh'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
Southern Indiana Railroad company,
reviewing its history up to the time
Mr.. Walsh purchased It for $175,O0O.
"He had issued to himself" Mr..
DODynb Sdlu, SOVV,VVV III OOhu0 ~ SAS
very time It was organized, and those
bonds had NJ value. He put them
into the Equitable Trust company,
selling them at par, then issued an
other 100000 Of bonds and sold them
at par.
"He took money from time to time
from the Chicago National bank and
from the Equitable Trust company to
develop this property, depositing
worthless bonds until he had deposit
ed with the former 100000 and with
the latter $s5O,OOO. He tried to get
the bonds listed on the New York
stock exchange, but he was told to
show their distribution and the mat
ter was laid over. Later he stated
that they had been distributed. They
had been distributed in his own banks
at his own price"
In 1901 and 1902 the prosecutor told
the fury various amounts Of money
were taken from the banks with the
unmarketable bonds as collateral until
more than 100000 had been re-
moved for the personal use Of Mr.