The evening world., 1908-10-16


He Examined the Morse Checks.
The next witness was Edward p. Max
ey, OF Philadelphia, a special investiga-
tor from the Department OF Justice, who
has spent the last six months tracing
every check bearing Morsos signature
that passed through the National Bank
of North America for three years
II have examined the books OF this
bank carefully said Mickey. II had
three assistants working under me. We
paid particular attention to loan pc-
counts. Individual lcdgers. tellers' books,
cashiers checks, deposit slips ana o,r-
tificates OF deposit"
q. Did YOU find any record ot loans
made In the firm name of Davis 4 Brown
dated Dec. S, 1900? A. Yes. Inere was
record Of a call loan pad to DAVIS
Brown of sllAIl2s3 The time loan 1c-
count was credited with this amount,
with interest added. There was a record
also. signed By A H. Curtis, showing
that the time loan ana 5000 shares OF
American Ice We're transferred to duhn
? +. Carroll Subsequently 5000 shares of
Ice and 100 shares OF United Copper We're
recorded as being lcft as collateral to
cover loans to Davis d Brown, the stock
continuing in the name of John +. Car
roll. The notes of the firm We're for
STA, 512.Ss, $3.50 and 81 707.l7. The 81.
b50 loan and interest were pula a few
days later and the copper stock was
Withdrawn. on Jan, s. 1906, the remain
ing two loans We're paid and the Ice
stock was released.
To Show Loose Dealings.
All this was a preamble TO showing
that on Dec. Ice stock was quoted at
-, thus making the value of 1000 shares
$4,000. On Jan. i the market price was
q l., swelling the Valre OF the s;OCi> to
$4,000. The purpose of Mir. Stimson was
10 bring out that the bank had not de-
nanceG the " per cent safety margin
as required by the Stock Exchange rule.
1t was the opening wedge OF tie Gov
ernmentS plan to show loose dealings
inside the bank wherever Noyse's own
stocks figured in the transactions.
BY singular coincidence John +, Car
roll entered .ilst as his name was
brought out for the first time in the
Continuing. Mr MaXey tod how he
found record OF demand loan dated
Jan. II. iJO6, showing Leslie b. Whiting
had borrowed $4,000, uepositiuE as col
lateral Ice Trust stock to the amount
OF a,OOO shares. These shares being also
in the name Of Carroll IN connection
with this transaction MoAey found a
check for Sl2.61S, payable to the order
OF either Carroll or Morse.
Hints at Jugale.
'In other words" said Mickey, the
books show that on the day the Whit
ing account of $500 was opened there
was closed out "a loan to john i. Car
roll of $4,000, two interest accounts of
S195 aifd Sl26.50 and check endorsed by
MIR. Morse for Sl2, bringing the total
up to $1,000, almost the amount of the
Whiting loan. Tie value of 1000 shares
of Ice stock on that date was approx
mately $1,000
Mr.. Stimson has alleged that Whit
Ing was not d responsible borrower
but a dummy whose name was used
to cover up speculations in Ice with the
On Jan, Ii. 1906, Whiting, according
r TO MoS s Wb tho Similar IL heyG s2
of 1900 Morse shares of Ice. The two
loans to Whiting We're entered as paid
ON March e. on the same date there
bank, Ice having advanced materially
In the market AT the same time a
record Appeared IS showing wing that the
to one Thompson, Calvin J. Austin and
Phillip l. Britt, in the guise of new
loans.
Bank Buys Ice Shares.
Mickey had also turned up the rec
shares of Ice n; 80 on March 90. On |
April 8 the journal carried record of
a mysterious sales account. of s27,5OO, |
and on the same day Leslie Whiting
to exactly s21 800.
On April II Leslie z. Whiting got
another loan of sl3S.500, and for this |
1000 shares OF ice We're entered as col
lateral. Al the same time the old loans |
against Whiting We're cancelled. c. +. |
Morse was simultaneously credited on
his own account with 100000 on a
Tin that" said Mickey, the entire
transaction covered loan of sl33.5O0 in
collateral. OF this $4,000 represented
the purchase price of the first 800
shares and the cashiers check of
100000. which was the cost OF the rest,
was credited to Mr., Morse's account"
Another loan according to MOXey was
made to April 10 to Mr.. Whiting, this
one amounting to $4,000 on l,5OC shares
of ice. On the same day the cashiers
check for $4,000, upon that same loan.
was credited 10 Morse's personal ac-
count.
The last two loans were credited az
paid on April II. The sum OF $4,000 was
credited to the banks commission ac-
count on this day an. and Mr., MoTse.s per-
cumulated loans to Whiting.
Constantly in the spring of 1906
Whiting borrowed varying sums on
blocks OF Ice stock which never went,
Morse OF 400 shares for SPAS, go
through demand loan to Whiting for
s2S6,oOO on 1000 shares, Again
cashiers check Of S226,OoJ was credited
10 Morse's personal account. slim
sons object was to show that Morse
with Whiting as his dummy, was con
stantly loaning himself money on his
own 1900 busy shares OF American
Ice Securities Company stock, and
pocketing the profits as the stock ia
creased in value. During all this
period Ice was being pushedup in the
market.
Still Tracing the Loan,
The Government lawyer then took up
the matter of the remaining half of the
loan to Whitney amounting to slls.OOO.
j was recorded as paid Sept, !, 1900
ON the same day the ever active 1000
shares of Ice stock We're Withdrawn.
on the same day, too, new loan OF
fl5S, 900 was made in the name OF John
X, Elliott, who offered as his collateral
shares Of the Arizona Smelters Com
pany. After Morse had been credited
with the customary cashiers check for
certa IN prohts a new figure ca1trg INTO
the deal in the person OF Wesley u
Oler, the president of the Amei}san Ice
Securities Company,
In tIresome succession Mr.. MaXey re-
cited one transaction after another
The amounts varied sometimes, but
zach Of lnem was typical of all the
others II Mr. StmsOu's Influences and
deduction could be accepted as correct
Morse, operating through dummies. en-
gagged in the practice Of using the banks
money 70 uuy his own stock, deposited
the stool as collateral TO cover the
loan. cleaned mp the profits and repeat
ed the operation a. over again.