The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-01-19
JOHN R. WALSH
FOUND GUILTY
Warning to Bankers Who Are
Tempted to Speculate
With Their Deposits.
FIVE YEARS THE MINIMUM
APPEAL WILL BE TAKEN TO
HIGHER COURT.
FIVE YEARS THE MINIMUM

Chicago, Jan. 1S.-John r. Walsh,
president of the defunct Chicago Ma
tional bank, was today found guilty of
Incorporating the funds of that in
stitution. The jury, which had been
considering the case since Thursday
afternoon, reached an agreement short
ly after o'clock this morning, but the
verdict was not announced until after
court reconvened at 40 o'clock. The
penalty under the law for the crime
of which Walsh was convicted is i'm
prisOnment for a period of not less than
five years. 1t does not permit the sub
stitution of a fine for the prison term.
Walsh was found guilty of fifty-fOur
counts. The original indictment con-
tanned 1S2 counts. DemurTers were sus-
tanned as to thirty-two counts, which
left $50 upon which the jurors were re-
quired to pass.
The verdict was read by the clerk of
the court at 1917. Immediately after
the reading of the finding attorneys for
Walsh asked that the jury be pOlled.
This was done.
Charge Against Walsh.
The charge against Walsh grew out
of the closing in 1905 of the Chicago
National bank. of which Walsh was
president. and its allied institutions,
the Home Savings bank and the Equit-
able Trust company. Walsh was ac-
cused of having loaned funds of these
institutions, aggregating S16,0OO,OOO, on
fictitious and insufficiently secured
struggling enterprises which he him
self had founded and practically
owned Many of the notes. it deVel-
oped at the trial, were signed without
authority by the names of various en-
ployes Of Walsh.
The directors of the bank testified
they were not consulted by Walsh as
10 the making of the loans; that they
knew nothing of them. TWenty-siX OF
the notes were described as memo
randum' notes, and they formed one
of the chief features of the trial. They
represented more than 81 900 600. Meth
DDS of cOncealment employed in carry
ing the transactions on the books of
the bank and alleged misrepresenta-
tons made in reports to the national
bank examiners kept the latter in ig-
nOrance of the true condition of the
banks finances and the nature of their
securities for several years prior to the
closing of the institution.
Claims of Defense.
The defense took the ground that all
of the Walsh enterprises were built up
in order to save and protect original
loans by Walsh in good faith. The
claim was also made that walsh did
not hold the controlling interest in the
corporations which profited by the
loans. but that the Chicago National
bank held it,~Walsh being only d
trustee and a conservatOr of the banks
interests. Walsh was on the witness
stand for two days. He admitted near
ly all of the transactions charged
against him, but chung to the defense
that all he did was for the good of the
bank he headed, and that all of the
loans proved good, and that no one
lost anything in consequence Of them.
In substantiation of the latter claim
the defense offered evidence to show
that since the closing of the banks
Walsh had bought back the collateral
taken from him by the clearing house
banks amounting to $1,000, co., giving
in payment a note for the same
amount, payable in five years. The
collateral released, Walsh was able to
go ahead with the building of his rail-
roads Another fact brought out was
that the associated banks of Chicago
took a pro rata share of the $1,000, 900
loan negotiated by Walsh for the re-
demptiOn of his securities, and that
these banks today hold the stock and
bonds which Walsh was prosecuted for
making loans upon. This circumstance
was made the basis of Walsh's claim
brought out at the trial that the value
of the securities had been established
The trial covered a period of nine
weeks and was twice interrupted by
illness of jurors.
Juror in Tears.
Walsh received the verdict with lit
tie show of emotion. but one of the
jurors, Ebert Palmer of Harvard, ILL.,,
burst into tears as he took his seat in
the jury box, and was so overcome
during the proceedings that was
scarcely able to answer the clerk when
asked if the finding represented his
view as to the guilt of the defenda Mt
AS the clerk read off the names the
jurors in turn answered his question in
Continued on page 2.