The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-01-18
John r. Walsh.

The penalty under the law for the
crime of which Walsh was convicted
is Imprisonment for a period of not
less than five years. 1t does not per-
NIT the substitution of fine for the
prison term.
The charge against Walsh grew out
of the closing in 1905 of the Chicago
National bank, Of which Walsh was
president and it's allied institutions,
the Home Savings bank and-the
Equitable Trust company. Walsh was
accused of having loaned funds of
these institutions. aggregating six
teen millions of dollars, on fictitious
and. fnsufficiently secured struggling
enterprises which he; himself had
of the notes, it developed at the trial
were signed, without authority, with
the names of various employees of
Walsh. The directors of the bank tes-
titled they were not consulted by
Walsh as to the making of loans and
that they knew nothing of them.
Twenty-six of the notes were describ-
ed as memorandum" notes and they
formed one of the chief features of
the trial. They represented more
than 100000.
Methods of concealment employed
in carrying the transactions on the
books of the bank and alleged mis-
representations made in reports to
the national bank examiners kept the
latter in ignorance of the true con-
lition of the banks finances and the
nature of their securities for several
years prior othe closing of the in
Stitution.
The defense took the ground that all
Of the Walsh enterprises were built up
in order to save and protect original
loans made 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 1T, Walsh being only trus-
tee and a conservator of the banks in
terests 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
banks 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 Walsn
had bought back the collateral taken
from him by the clearing house banks.
amounting to 100000, giving in pay
ment a note for the same amount, pay
able in five years.
The collateral released Walsh was
able to go ahead with the building of
his railroads Another fact brought out
was that the associated banks OF chi
capO took a pro rata share of the ST.
600 600 loan negotiated by Walsh for the
REDEMPTION of his securities and that
these banks today hold the stocks 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 i'll
ness of jurors.
He was found guilty on 81 counts.
The original Indictment contained
I1s2 counts Demurrers were sus-
tanned as to thirty-two counts, which
left $50 upon which the jurors were
required to pass.
The verdict was read by the clerk
| of the court at 1917 Immediately
after the reading of the finding at
| torneys for Walsh asked that the
iury be polled. This was done.
Walsh received the verdict with
little show of emotion, but one of the
Jurors. Gilbert Palmer. of Harvard,
| I'll burst into tears as he took his
seat in the jury box and was SO over
| come during the proceedings that he
Was scarcely able to answer the clerk
when asked if the finding repre-
santed his view as to the guilt of the
| defendant.
AS the clerk read off the names the
Jurors in turn answered his question
| in the affirmative. Wnen it came
Planners turn to respond he arose
| with lbs head bowed, swayed as
/ though about to fall and muttered
something behind his hand. Not until
| the question had been repeated