The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1908-01-05
BANKING LAWS
DEAD LETTERS
Defense In Walsh Trial Brings
Out Startling Facts
LOOSE PRACTICE IN BANKS
One Witness, Who Was Formerly In
the Office of the Comptroller of the
Currency, Testifies To Nom
Enforcement of Statutes.

Chicago, January 4-That certain sec
tons of the national banking laws are
dead letters, so far as banking practice is
concerned and that these violations meet
with only formal criticism from the comp
troller of the currency was the testimony
today of George NJ. Coffin of New York,
former deputy comptroller of the cur
rency. in the trial of John R. Walsh on
charges of misapplying the funds of the
defunet Chicago National bank. Mr.
Coffin was for eight years vice president
of the Beaver National bank of New
York. Mr.. Coffin said that he had been
connected with the office of the eomptrol-
Ter of the currency from 1886 to 1889 and
that he still held commission as bank
examiner.
Coffin was asked by Attorney John S.
Miller for the defense, if it was
prevailing practice of national banks to
make accommodations and memorandum
notes and loans in excess of the limit
provided for by the banking laws. Be-
fore the witness could answer an OBJ
lection by the attorneys for the gov
eminent brought on long argument dur
ing which Judge Anderson declared that
competent nor relevant, so far as Walsh's
intent in similar transactions was con-
cerned, but he allowed it TO be given
in order that the defense might lay a
foundation for an attempt to prove that
such practices are general all over the
country.
Bad Rule Permitted.
The question was then repeated and
Mr.. Coffin answered in the affirmative.
Then the examination broadened.
Were such cases as this one in which
Mr.. Walsh is involved, frequently re-
ported to the comptroller by the bank
examiners?"
YES sir"
Were they criticised by the comptrol-
Ier?"
mo, there was no special objection"
What took place in the comptroller's
office?
THE reports were gone over and print
ed letters calling the attention to the
bank statutes were sent to the banks
Ibid the practice of making excessive
loans prevail?"
Yes. There were always about one
third ST the banks making such loans.
InlS prevailed IN reserve districts ana
in about so cities of the country, includ-
ing New York and Chicago"
Mr.. Coffin then testified that the printed
letters sent to the banks were perfume
tory, signed with autograph stamps and
containing no directions regarding the re-
duction of excessive loans.
These letters We're not followed up and
replies even were not necessary.
Matters of Judgment.
The witness asserted that all loans from
banks by their executive officers with
in the limit provided by law are gen.
orally considered matters of judgment
Memorandum notes are customary, he as
serted in all banks, with which he is
familiar.
Under cross-examination by Fletcher
Dobyns assistant district attorney, Mr..
Coffin admitted that he had never seen
any memorandum notes like those in the
Chicago National bank, to which officers
of the bank signed another persons
name without authority from, or knowl-
edge of that person. Later Mr.. Dobyns
asked:
Was there any limit on excessive loans
that depended ON the amount of the
banks capital?'
THAT depended more on the amount
of the deposits than the capital"
When asked for case where excess
sive loans had been made by a bank
officer to enterprises in which he was
Interested, the witness cited the Chester
Street bank of Philadelphia, and then
asserted that this institution has failed,
and is now in the hands of a receiver.